Credit Insurance, Why Is it Important?

If you’re running a business, it is crucial you are protected with credit insurance. 

Credit insurance can cover and protect you from multiple different risks. This includes protection in case a customer is not paying or if a supplier is not delivering or has gone bust. Credit insurance also keeps watch on customers’ credit to give warnings and help reduce exposure to potential bad debt. 

Risk from Customers

On occasion a customer doesn’t pay up, credit insurance can cover you even if you believe your business model, or even that of your customers, is safe. However, there are still risks, particularly in the current climate. 

Risks from Suppliers

Your company could be put at risk by suppliers. For example, you may pay for stock and then not receive a delivery, or the supplier to which you spent money goes bust suddenly. Again, Credit Insurance can cover you.

What does credit insurance do?

If you don’t receive payment or a contract is not completed, leaving you out of pocket, your insurer can chase the debt. If the debt is not recovered, the insurer usually pays for 90% of the loss. In addition, the insurer will keep an eye on the credit status and stability of your supply chain and warn you in case a business looks vulnerable, allowing you to act before anything goes wrong.

Credit insurance is also a great tool to increase your sales and profit. 

Contact us at 01274 515747 or email us at mail@lwood.co.uk to see how we can support you with credit insurance.