Bill-and-Hold Arrangements: Insurance Considerations

Bill-and-Hold Arrangements: Insurance Considerations

What Is a Bill-and-Hold Arrangement?

A bill-and-hold arrangement is one in which a seller invoices a buyer for goods that have not yet been physically delivered — the goods are held by the seller (or a third party) at the buyer's request, pending delivery at a later date. These arrangements can arise in a variety of industries and for a variety of reasons, including storage constraints, production scheduling, or buyer-requested delivery timing.

Why Bill-and-Hold Arrangements Raise Insurance Questions

Trade credit insurance policies typically cover receivables arising from the sale of goods or services. Bill-and-hold arrangements can raise questions about when a sale has occurred, whether the receivable is covered, and what documentation the insurer will require in the event of a claim. Policies vary in how they address these arrangements, and it is important to understand the policy's terms before relying on coverage for bill-and-hold receivables.

Working With JMR

JMR works with businesses to evaluate whether their trade credit insurance provides appropriate coverage for bill-and-hold and similar arrangements. We can help review policy terms, identify potential coverage gaps, and work with insurers to address specific situations.

This article is for general informational purposes only and does not constitute insurance, legal, financial, or tax advice. Coverage terms, conditions, exclusions, and availability vary by insurer and policy. Consult with a qualified insurance professional regarding your specific situation.

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