by lakemen » Sat Jul 08, 2006 05:32 am
Credit Insurance
Commercial coverage against losses resulting from the failure of business debtors to pay their obligation to the insured, usually due to insolvency. The coverage is geared to manufacturers, wholesalers, and service providers who may be dependent on a few accounts and therefore could lose significant income in the event of an insolvency.
Commercial coverage against losses resulting from the failure of business debtors to pay their obligation to the insured, usually due to insolvency. The coverage is geared to manufacturers, wholesalers, and service providers who may be dependent on a few accounts and therefore could lose significant income in the event of an insolvency.
Posted: Wed Jul 25, 2007 02:12 am Post Subject: Credit Insurance
This cover is classified into two types of covers by the risk. The one is trade credit which covers customers' defaults of a certain business company, and the other is consumer credit which covers defaults of numerous individual end users of a business company.
Trade credit insurer pay for the non performing account receivables of insured and exercise subrogation to the buyers after indemnification. They have a large amount of information about companies around world because they cover imports/exports as well as domestic tradings. Insurer and insured negotiate credit line for each individual buyer. Insurer gives an alarm to the insured when one of its buyers goes into bad financial status, and reduce the credit line accordingly.
Some of insurers are Euler Hermes, Coface, Atradius and so on.
byo
Add your comment