Frequently Asked Questions

Trade credit insurance protects your business against losses when customers fail to pay their invoices. This includes both insolvency (bankruptcy or liquidation) and protracted default (extended non-payment). It works by insuring your accounts receivable. If a customer doesn’t pay, the insurer will support debt recovery and, if necessary, pay a claim —covering up to 90% of the invoice value. Protecting your cash flow and keeping your business moving.

Trade credit insurance typically covers: Customer insolvency (liquidation, bankruptcy), Protracted default (non-payment after a set period) , Domestic and international receivables. In today’s environment, the most valuable aspect is often cover for delayed payments, not just insolvency.

Yes, trade credit insurance is specifically designed to protect businesses against unpaid invoices. Whether a customer becomes insolvent or simply fails to pay within agreed terms, a policy can provide financial protection and recovery support. This is especially important in the current market, where many businesses are still trading but taking longer to pay.

The main type of insurance that covers unpaid invoices is trade credit insurance. Unlike standard business insurance, it focuses specifically on B2B receivables, protecting your revenue when customers don’t pay.

The cost of trade credit insurance is typically a small percentage of your insured turnover.

Premiums vary depending on several factors. Your annual turnover is most important factor but also taken into account is the industry risk, the risk profile of your customer base and any claims history. In any case, the cost is significantly outweighed by the protection it provides against bad debt and cash flow disruption.

No, many insurers now offer tailored solutions for SMEs and growing businesses.

In fact, smaller businesses often benefit the most, as a single unpaid invoice can have a major impact on cash flow.

Yes, trade credit insurance can cover both domestic and export customers. This allows businesses to confidently expand into new markets while managing credit risk.

If a customer fails to pay:

1. The insurer supports recovery using their internal collection agents
2. If the debt cannot be recovered, a claim is paid after a set waiting period.
3. Most policies cover up to 90% of the invoice value

This ensures your cash flow is protected, even when customers default.

No — it works alongside your credit management processes.

Insurers expect businesses to maintain good credit practices, but they provide additional support, insights, and protection when things go wrong.

This is one of the most common risks in today’s market. Trade credit insurance can cover protracted default, meaning if a customer simply delays payment beyond a set period, you may still be able to claim. This is critical in the current environment, where many businesses are under pressure but still operating.

Trade credit insurance helps by providing cover for delayed payments, supporting collections and recovery, and offering early warning insights on customer risk. It turns slow-paying customers from a financial threat into a manageable risk.

Protracted default refers to a situation where a customer fails to pay within an agreed extended period, even though they are not insolvent. This is one of the most valuable features of trade credit insurance in today’s economy, giving peace of mind and a safety net if customers are slow to pay.

Yes, one of the key benefits is cash flow protection. Policies can provide claims for unpaid invoices, support during delayed payments, and access to provisional claims in some cases, helping businesses continue operating without disruption.

Debt protection insurance is a broad term, but in a business context it often refers to trade credit insurance. Trade credit insurance is specifically designed to protect businesses against unpaid customer invoices.

Rising fuel and operating costs increase pressure on margins and working capital. This often leads to slower payments, extended credit terms, and increased reliance on payment plans. Even seemingly healthy businesses can become slow-paying customers under these conditions.

Current factors include rising material and fuel costs, supply chain disruption, higher interest rates, and increased tax obligations. These pressures do not always lead to insolvency immediately but often result in delayed payments first.

Yes, even when insolvency levels stabilise, risk remains high. In many cases, the bigger issue is payment delay rather than failure. Trade credit insurance provides protection across both scenarios.

During uncertain periods, trade credit insurance protects your receivables, provides visibility into customer risk, supports confident trading decisions, and reduces exposure to unexpected losses. It allows businesses to grow even when conditions are volatile.

The risk landscape has shifted. Businesses are not always failing immediately, they are under pressure, managing cash flow tightly, and taking longer to pay. Trade credit insurance ensures you are protected at every stage, from delayed payment through to insolvency.

Yes, trade credit insurance is highly relevant for the construction industry where projects are often long-term and exposed to cost fluctuations. It protects against builder or contractor insolvency, delayed progress payments, and non-payment for completed work, helping construction businesses maintain cash flow and reduce project risk.

Yes, in many cases retention monies can be covered under a trade credit insurance policy. Retention amounts are often held for extended periods, creating additional exposure, and a tailored policy can include cover for these amounts, helping protect your business even after project completion.

Labour hire businesses are especially exposed because they pay wages weekly, invoice clients on terms, and carry significant upfront costs. Trade credit insurance protects against clients failing to pay, extended payment delays, and cash flow gaps during disputes, ensuring you can meet payroll even if your clients do not pay on time.

If a client delays payment beyond agreed terms, trade credit insurance can cover protracted default. This means recovery action is supported, claims may be payable after a set period, and cash flow disruption is reduced, which is critical for labour hire businesses where delayed payments can quickly impact operations.

Yes, subcontractors can use trade credit insurance to protect against unpaid invoices from builders, developers, or head contractors, which is especially important in today’s environment where payment delays are common even when projects continue.

Trade credit insurance helps contractors cover delayed payments, access professional debt recovery, and receive payment support through claims, reducing reliance on chasing payments and improving financial stability.

Wholesalers often extend significant credit to customers across multiple industries. Trade credit insurance helps by protecting large debtor books, providing insights into customer risk, and supporting expansion into new markets, allowing wholesalers to trade confidently without taking on excessive risk.

Yes, trade credit insurance is particularly valuable where exposure to a single customer is high. If a major buyer fails to pay, the insurer supports recovery, a claim may be paid, and cash flow is protected, preventing one bad debt from impacting the entire business.

Yes, certain policies can be structured to include binding contract cover. This protects your business where goods or services are contractually committed, exposure exists before invoicing, and cancellation or default could lead to financial loss, providing protection earlier in the transaction lifecycle.

Pre-shipment or pre-delivery cover protects your business before goods are delivered or services are completed. This is useful when you incur costs upfront, production or procurement begins before invoicing, and a customer cancels or becomes unable to proceed, ensuring you are not left exposed before the invoice is issued.

Yes, trade credit insurance is designed specifically to cover unpaid invoices. It protects against insolvency, delayed payments, and protracted default, ensuring your revenue is protected even when customers do not pay.

The main solution is trade credit insurance, which protects B2B receivables and supports recovery.

Protracted default is when a customer fails to pay within an extended period, even if they are not insolvent. This is one of the most valuable protections in today’s market, where delays are more common than outright failure.

Rising fuel, material and supply chain costs reduce margins and increase financial pressure. This often leads to slower payments, payment plans, and increased credit risk, meaning even strong businesses can become slow-paying customers.

The risk environment has shifted. Businesses are still trading, under pressure, and taking longer to pay. Trade credit insurance protects your cash flow at every stage, from delayed payment through to insolvency.