Glossary

What is trade credit insurance?

Trade credit insurance, also called accounts receivable insurance, provides your business with protection against the failure of your customer to pay its trade debts. This can arise because your customer becomes insolvent or because your customer does not pay within the set timeframe. These risks are usually described as commercial risks. Companies that export can also protect themselves against a range of political risks that may prevent or delay payment. This arises when payment is not received as a direct result of a war in the buyer's country, cancellation of a contract by the government of the buyer's country, or when a government implements regulations which either prevent the export or import of the goods - or prevent or restrict the transfer of hard currency - from the buyer's country.

Who uses trade credit insurance?

Any business selling on open account terms to other businesses can benefit from trade credit insurance. Euler Hermes’ customers range in size from small businesses to large, multi-national companies. Firms in most sectors of the economy - including business services as well as those trading in goods - use trade credit insurance. Read about Euler Hermes' trade credit insurance policy types.

What are the benefits of trade credit insurance?

There are many benefits including:
- Better credit control and protection against catastrophic bad-debt losses
- Better risk management through an early warning system bolstered by the Euler
Hermes database
- Better business planning through the elimination of unknown risks
- Improved working capital from your lender because you have enhanced the
quality of your accounts receivable with trade credit insurance
- Better sales targeting, thanks to Euler Hermes’ proprietary information that can
be used to target new customers and markets and monitor existing customers
- The benefit of Euler Hermes’ debt collection capabilities and network
- Improved cash flow, because you receive payment for unpaid invoices that are insured.

Why choose Euler Hermes?

Euler Hermes’ experience is unsurpassed in North America. For more than 100 years, Euler Hermes has protected companies in nearly every industry against unexpected bad-debt losses. As North America's largest trade credit insurer, and as a member of Euler Hermes, the world’s premier trade credit insurer, the Euler Hermes Group has unparalleled access to proprietary information and global risk management expertise. The Euler Hermes group has offices in more than 45 countries across six continents with 5,400 employees.

Euler Hermes supports its clients in all aspects of credit management. Its underwriters are industry specialists who will work closely with you to supply in-depth credit analysis and ongoing account monitoring to provide early warning of potential credit risks - before they become a loss. And, a policy with Euler Hermes gives you the benefit of Euler Hermes’ database with proprietary information on more than 40 million companies worldwide.