Securing contracts against payment defaults
Coverage remains fixed throughout the policy period, with non-cancellable credit limits, which differs from short-term credit insurance, providing businesses with consistent financial security for their contractual agreements.
Credit insurance benefits for contracts
A LED lighting supplier were awarded a £1,500,000, 18-month, contract to replace existing lighting systems with energy efficient solutions, in all of the buyer’s locations, nationally.
Risk: Potential payment default and buyer failure before physical works started (pre-credit risk) during the manufacture and purchase of materials stage.
Solution: The business secures Medium Term Credit Insurance, covering 90% of the outstanding balance, including a loss payee provision for the company’s bank who were financing the project.
Outcome: If the buyer defaults, the company is covered against non-payment of the insured receivables and their work in progress costs.
A manufacturer of automotive parts secures a £2,000,000 two-year contract with an overseas distributor, with payment terms of 40% upfront and 60% phased over three years.
Risk: Potential payment default or delays due to international factors.
Solution: The part manufacturer purchases Medium Term Credit Insurance covering 90% of the contract value, including Political Risk cover.
Outcome: Insurance protects against default, ensuring the manufacturer's cash flow remains stable and operational disruptions are minimised, enhancing financial resilience in their international trade.
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Credit insurance for lease agreements
Covering risk of non-payment of instalments under leasing agreements for goods, with policy terms and credit limit fixed for any period, up to five years.
Credit Insurance for single contracts
and leases
Single-situation solutions for buyer non-payment under stand-alone supply contracts and lease agreements.