Trade Credit Insurance
What Is Trade Credit Insurance?
A practical way to protect your receivables, support your growth and manage the risk of customer nonpayment at home and abroad.
Discuss Your SituationIn Simple Terms
Trade Credit Insurance Explained
Trade credit insurance (TCI) is a risk management tool that protects your accounts receivable against the risk that your customer does not pay. It can help you sell with confidence, manage customer risk and support your cash flow, both domestically and internationally.
Business Benefits
Why Businesses Use Trade Credit Insurance
Trade credit insurance can provide a range of practical benefits, including:
Protection Against Nonpayment
Protect your accounts receivable against covered buyer nonpayment arising from commercial risks — such as insolvency or bankruptcy and protracted default — and, depending on the policy, covered political risks.
Credit-Management Support
Gain access to insurer credit information and monitoring tools that can help you evaluate and manage customer credit risk on an ongoing basis.
More Competitive Credit Terms
Offer more competitive open-account credit terms to customers, knowing that covered receivables are protected against nonpayment.
Potential Financing and Borrowing-Base Support
Insured receivables may, where accepted by the lender, be more acceptable as collateral — potentially improving your borrowing base and access to working capital. The lender always determines whether insured receivables are eligible collateral and what advance rate and other requirements will apply.
How It Works
A Straightforward Solution
Discuss Your Needs
We learn about your business, customers and markets.
Insurer Reviews and Quotes
We approach the appropriate insurers and compare options.
Credit Limits Are Approved
The insurer sets credit limits for your buyers based on its assessment of their financial strength and payment risk.
You Ship and Invoice
You invoice your customers and monitor receivables with ongoing insurer support.
If a Loss Occurs
You file a claim. If covered, the insurer indemnifies you according to the policy terms.
What It Covers
Protection Against Covered Buyer Nonpayment
Depending on the policy and insurer, trade credit insurance can cover buyer nonpayment arising from covered commercial risks and, depending on the policy, covered political risks, including:
Commercial Risks
- Buyer insolvency or bankruptcy
- Protracted default (continued nonpayment)
- Non-acceptance of goods (if added by endorsement)
Political Risks (where covered by the policy)
- Government actions (e.g., expropriation, currency restrictions, import/export bans)
- War, civil unrest or political violence
- Transfer risk (inability to convert or transfer currency)
- Other political events as defined in the policy
What It Does Not Cover
Important Limitations
Trade credit insurance does not cover every situation. Common exclusions include:
- Disputes over product quality, specifications or performance
- Contractual breaches not related to the buyer's financial inability to pay
- Transportation losses, insurable under property, cargo, shipping, freight or similar insurance
The policy wording and exclusions vary by insurer. We help you understand how the coverage applies to your specific sales, buyers and markets.
Common Policy Structures
Different Options to Fit Your Needs
Multi-Buyer (Whole-Turnover)
Covers a broad range of customers, and is often used for ongoing sales programs.
Key-Account (Select-Buyer)
Focuses on specific customers, such as your largest or higher-risk buyers.
Single-Buyer
Covers one customer, often used for large exposures or new markets.
Frequently Asked Questions
Quick Answers
Explore Your Options
Choosing the Right Trade Credit Insurance Market
Compare private-market insurers and EXIM to find the right fit for your business.
Explore MarketsEXIM Export Credit Insurance
Learn about EXIM's government-backed export credit insurance programs and JMR's Platinum Tier Broker status.
Learn About EXIM