Clarify which product is meant
Trade credit insurance covers eligible customer nonpayment risks under a business policy. Insured events may include insolvency, protracted default, or specified political risks.
Consumer credit insurance is different: it can cover loan payments or balances following specified events such as death, disability, or involuntary unemployment, depending on the product.
Trade credit policy conditions
Review approved buyers, credit limits, eligible transactions, deductibles or retained risk, exclusions, and waiting periods. There is no universal reimbursement percentage.
The policy can require prompt reporting of overdue accounts and losses, preservation of documents, and compliance with claims deadlines. Disputed invoices or unauthorized changes to payment terms can affect eligibility.
Collections and claims
Hypothetical example: An insurer-approved buyer fails to pay an eligible invoice. The seller should follow the policy's reporting and recovery instructions rather than assume the invoice is immediately reimbursable.
Check settlement authority and the treatment of later recoveries or insurer rights. Insurance can reduce a covered loss but does not guarantee cash availability, borrowing approval, or payment of every overdue invoice.
Example reference: EXIM export credit insurance. Its requirements apply to its specific policies.
Consumer-product reference: Washington insurance regulator's credit insurance overview.