Why a good credit insurancefor your business?

Why take out a credit insurance?

The Dutch economy is growing, yet every day 10 organizations go bankrupt. It could be that one of these organizations going bankrupt is actually one of your big debtors. What would be the financial consequences for you and your business if one of your debtors would go bankrupt? Can you afford a big outstanding invoice, or even invoices? And what if your company and its debtor network would grow? Do you know about the credit rating of the company of every one of your debtors?

For many organizations these questions remain unanswered. For other organizations, these questions do have an answer. Nevertheless, the possibility remains any surprises will emerge. How can your company answer these question as to avoid financial surprises?

A credit insurance can answer the before mentioned questions. The growth of the debtor network can be established in a responsible and secure manner. The financial flow of your organization will be secured through credit insurance. Do you want to know why taking out a credit insurance is recommended? We will explain this elaborately on this page.

What is a credit insurance?

A credit insurance is an insurance that can be applied per transaction, debtor or even complete turnover. A credit insurance ensures coverage for default due to insolvency or presumable insolvency of your debtors. If default occurs, the collection agency will proceed free from charge to yet claim the outstanding invoices. The costs for this collection are covered by the insurance, if this is included within the policy. The collection agency will attempt to claim the outstanding invoices by means of clear and apparent communication, focusing on the customer relationship.

However, there is a possibility the collection agency is not able to claim the outstanding invoice in certain cases, such as bankruptcy. So, what if the collection agency is not able to claim the outstanding invoice and no credit insurance is taken out? In this case, the amount of the outstanding invoices will be booked as a debtors loss.

And what would happen if the company did decide to take out a credit insurance? A credit insurance would in that case cover the risk of the default. The credit insurer will pay for the outstanding invoices, which would mean no debtor loss would occur. Because of this, you are assured of an optimal financial flow, even in case of non-payment. Therefore, the liquidity position increases.

Benefits of a credit insurance

Insurance against default; the most important reason for taking out a credit insurance is that the organization is protected against non-payment through the insurance. Outstanding invoices are paid out by the credit insurance according to the policy terms.

Increase of the financing options; a second benefit is the better financing options for the company. When the chance of non-payment is omitted, banks are more likely to extend credit, as the risk is simply lower.

Stimulating safe growth; another benefit is that a credit insurance stimulates safe and secure growth. New debtors are checked for their creditworthiness in an early stage. Financial concerns are taken away. Moreover, the company can fully focus on the credit-worthy debtors. 

Optimal financial flow; the average duration of the debtors paying for outstanding invoices will decrease when a credit insurance is used. The credit insurer will claim outstanding invoices using a professional collection agency. This guarantees an optimized financial flow which increases the liquidity benefits

The collection system; the entire collection system is covered by the policy coverage of the credit insurance. Unnecessary costs for collection that normally come up are avoided.

In-home expertise; the last benefit is that the company, when taking out a credit insurance, can profit from the expertise of the credit insurer. The goal for the credit insurers is to pay as little as possible. The credit insurer will try its best to get you your revenue. Checking the creditworthiness of the current and existing debtors is only one the tasks. A solid and integral collaboration is key.

Do you want to read more about the benefits of a credit insurance?

Credit insurance for every company

Many companies assume a credit insurance is only suitable for big organizations. Moreover, it is often assumed the premium of the credit insurance is 1% or higher. In both cases, nothing is less true. A credit insurance can be taken out per transaction, debtor or even the complete turnover. Furthermore, the costs of a credit insurance are much lower than would be expected. Credit insurances are already available with a premium of 0.035% with 100% coverage.

Is a credit insurance suitable for your company?

A credit insurance can, as mentioned above, be taken out for every company. It offers additional value and a dozen benefits for every business, branch or market. Whether a credit insurance is advisable for your company specifically depends on several factors, like your business operations, the market, your profit margin and the debtor network. The above mentioned benefits are decisive reasons why big organizations, MKB-businesses and small business have taken out a credit insurance through us.

Do you want to know what a credit insurance could do for your company?

Because we are connected with multiple partners, we commit to our customers vigorously and have over 40 years of experience in credit insurances, we can guarantee the best credit insurance for your company in which we consider your business operations. We focus on your wishes, compare the selection and choose the best credit insurance together with you.

Do you already have a credit insurance. Dare us to find you a better credit insurance.

In a personal consultation, we would happily explain to you what a good credit insurance could do for you and your company. The consultation and the consequent customized quotation are completely free of charge and obligation.