》What's Trade Credit Insurance?

Trade credit Insurance providing the coverage that insurance company shall indemnify your losses on account receivable of credit sales if your buyer cannot pay because of insolvency, protracted default or other insurable risks.

Credit sales hereinafter are in exclusive of the terms of Cash on Delivery, Letter of Credit and transaction with associated companies.
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》Benefits for enterprise with Trade Credit Insurance?

By transferring bad debt losses to insurance, the insured is able to control the risks of credit sales, and handle it's operational finance without restriction.

• Balance sheet protection, increased profitability
• Tightens discipline in credit control
• Obtaining reliable opinions on markets and buyers
• Allows exporters to venture into new markets and target new buyers.
• The insured could present credit policy as the credit enhancement tools for financing with financial institute.

》Coverage of Trade Credit Insurance

Trade Credit Insurance covers the risks assume by the insured of providing buyers credit sales, the insured risk in account receivable including

• Bankruptcy or insolvency of a buyer.
• Overdue of payment or protracted default
• Political risks

But the following risks are excluded

• Dispute debts
• Rejected or returned goods

》Are domestic buyers covered in insurance?

Either overseas or domestic buyers could apply for insurance cover.
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》What Risks are not covered in trade credit insurance?

• Fluctuations of Exchange Rate
• Dispute debts (exclude from cover until resolved)
• Intervention of any national, regional or local authority or state institution.
• War and natural disasters

》Characteristics of policy

• Whole turnover basis, single buyer case is acceptable but special.
• Deductible
• 90% cover
• Once the credit limit is approved, insurance cover for designated buyer is valid till expiry of the policy, the insured need not to declare to insurance company of each and every shipment.
• Credit management for the insurance is becoming convenient and flexible.

》What's the key factor for premium calculation?

• Premium rate locates in the range of 0.15% and 0.5%.
• Insurable turnover, Loss history, Industrial risk, country risk, Policy terms, Deductible and Credit management procedure.
• When the policy expired, adjustment premium will be calculated on actual declaration turnover during policy period, but the actual annual premium payment for policy will not be lower than the Minimum Premium.

》Premium Calculation

Estimated Insurable turnover multiplied by premium rate.

》Process for applying trade credit insurance?

Step 1: Fill in and completed questionnaire, the major questions are as follows:

• Company information of insured.
• Business portfolio: Sales History, Sales breakdown, country breakdown.
• Buyers information: Debtor spread and principal buyer.
• Credit Management procedure

Step 2: Insurer will provide the insured of the policy premium indication and the credit pre-checks for some principal buyers

For example: for instance, the insured transact with it's buyer A , the annual sales predict at US$1,200,000 with payment terms of o/a (60 days), then the applicable credit limit for buyer A is US$200,000 { = US$1,200,000 / [360 (days a year) / 60 (payment terms)]

Step 3: Policy terms negotiated and tailor made to meet the insured's needs.

Step 4: Policy terms and quotation were confirmed by the insured, Policy issuing by insurance company.

Step 5: Your company may promote the services / business without anxiety on account receivable.

》Administration when policy is effective

Once the policy effective, the insured need not to declare transaction to the insurance company during policy period except the following situations.

• A new buyer needs applying credit limit.
• Change credit limits of specified buyer.
• Payment overdue or losses occurred.

V&C will help you to set up risk management procedure, monitor and provide your buyer's credit and financial status for your reference in credit sales operations.

》V&C and Trade Credit Insurance

V&C has been working hard to win the trust of numbers of Insurance companies and our clients in area of Products Liability Insurance. However, we found our clients and many of manufacturers suffered from the bed debt while doing their business industrious. V&C would like to give them a hand to keep away from the threaten of Bad Debt when these companies work hard for global competitions. That's why V&C get involve to the Trade Credit insurance markets, Our Trade Credit Insurance team Not just concern the clients suffers, we have had our experts ready on board to provide outstanding services for you.