Short cover, single contract protection, credit insurance for lease agreements… it’s easy to get confused between trade credit insurance types if you aren’t familiar with the intricacies.
Here at Allianz Trade, we want our customers to make informed decisions that suit their business needs. So, if you’re considering covering your lease agreements, this article is for you.
This type of trade credit insurance cover mitigates the risk of non-payment for lease instalments. It provides financial protection throughout the lease term to ensure sustained stability and business confidence in leasing agreements over a multi-year timeframe.
While both are forms of trade credit insurance, the focus of the cover and the actions at the end of the terms differ. Single contract insurance protects service or product contracts, whereas credit insurance for lease agreements cover leases for goods. This means, at the end of the lease, the goods or assets could be returned and there might be no transfer of ownership, if this is an operational lease, for example.
READ MORE: Five questions to ask before purchasing single contract credit insurance
There are many advantages of taking out a lease agreements policy for your business. Here are just a few of the key benefits:
Credit insurance for lease agreements defends your business against non-payment of lease instalments, protecting your cash flow, and ensuring operational continuity. With proactive risk management, you can boost your business’ long-term resilience and financial stability in leasing operations so you can focus on growth and expansion.
This policy will provide your business with a high level of protection thanks to non-cancellable credit limits. These are agreed upon upfront and will last the length of the lease – usually a maximum of five years. This means your business will receive long-term resilience and stability, so you have the confidence to focus on business growth and concentrate elsewhere.
You can rest assured that up to 90% of the lease value is covered, depending on the residual value of the assets. This ensures your business is protected and you’re not out of pocket should something go wrong.
At Allianz Trade, we’re known for our wealth of data. We’ve more than 62,000 clients worldwide and monitor 83 million businesses in 160 countries. Therefore, we can help you make an informed decision on who you offer a lease.
During the lease term, we also have coverage triggers that activate if a customer defaults or becomes insolvent. This means that you’re one of the first to know if something goes wrong, and you can take action to ensure either the payment is made, you can repossess the machinery/assets, or you can make a claim.
Credit insurance for lease agreements can be highly beneficial to businesses. You should consider the value of your lease agreements, your cashflow, reserves, and the impact a default could have on your company.
If you’d like to learn more about credit insurance for lease agreements and how Allianz Trade could help you safeguard against the risk of non-payment of invoices and work-in-progress costs under a single contract, please get in touch.
Allianz Trade is the global leader in trade credit insurance and credit management, offering tailored solutions to mitigate the risks associated with bad debt, thereby ensuring the financial stability of businesses. Our products and services help companies with risk management, cash flow management, accounts receivables protection, Surety bonds, Business Fraud Insurance, debt collection processes and e-commerce credit insurance ensuring the financial resilience for our client’s businesses. Our expertise in risk mitigation and finance positions us as trusted advisors, enabling businesses aspiring for global success to expand into international markets with confidence.
Our business is built on supporting relationships between people and organisations, relationships that extend across frontiers of all kinds - geographical, financial, industrial, and more. We’re constantly aware that our work has an impact on the communities we serve and that we have a duty to help and support others. At Allianz Trade, we’re strongly committed to fairness for all without discrimination, among our own people and in our many relationships with those outside our business.
