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Trade Credit Insurance

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› Insurance Products › Trade Credit Insurance

coin stackAs technology continues to advance, more and more options for commerce come into play. Where cash and check used to be the preferred methods for exchanging money, now credit cards and even tap-to-pay solutions are the norm.

In the wake of this, new risks have also emerged that can threaten a business’ financial wellbeing. This is where the concept of trade credit insurance has risen to fill the niche.

What Is Trade Credit?

The term “trade credit” refers to a scenario in which one party gives credit to another to purchase goods or services. Trade credit goes beyond cash because it deals with “conceptual” money—in the same sense, getting a credit card with a $10,000 limit doesn’t mean that you suddenly have $10,000 mailed to your door. That money is conceptual, a credit you can trade when you make a purchase.

The Importance of Trade Credit Insurance

Trade credit insurance, also known as credit insurance or export credit insurance, protects a business’ risk of “bad debt” from customers and catastrophic loss.

In today’s business climate, organizations are expected to extend credit to their customers because it enhances purchasing power and creates opportunities that may haven’t been available otherwise. However, providing a credit option can pose a challenge for many companies because a single late payment or a customer’s inability to pay can dramatically change how profitable a venture is or how cash flow resolves.

Thankfully, businesses can protect themselves using trade credit insurance. This type of coverage removes much of the risk that companies face from parties who don’t pay; instead, accounts receivable can continue on as usual, assured that all compensation owed will be received. Along with providing insurance for a business’ accounts receivable, it also gives businesses a competitive advantage by offering favorable terms domestically and internationally.

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Get started today by filling out our Trade Credit Insurance application form!

Trade Credit Application

Credit insurance policies also provide information that helps companies to make sound credit choices. This information supports the credit department in the making of decisions quicker, faster and more efficiently. Credit insurance can also secure better financing options and provide access to more significant funding when the A/R is insured.

How Does Trade Credit Insurance Work?

Trade credit insurance protects businesses against the risk of non-payment by their customers. It can be a useful tool for businesses that extend credit to customers, as it provides protection against the risk of non-payment due to insolvency, bankruptcy, or other reasons.

Here’s how trade credit insurance typically works:

  • Business applies for coverage: A business applies for trade credit insurance coverage with an insurance provider. The insurance provider will assess the business’s creditworthiness and determine the level of coverage that can be provided.
  • Insurer assesses the risk: The insurer will evaluate the business’s customers and the credit risk associated with each of them. This evaluation is based on a number of factors, such as the customer’s credit history, financial stability, and payment history.
  • Policy is issued: If the insurer determines that the risk is acceptable, they will issue a policy to the business. The policy will outline the terms of coverage, including the types of losses that are covered, the maximum amount of coverage available, and any exclusions or limitations.

What Trade Credit Insurance Can Protect Against

Trade credit insurance can help to protect against:

  • Non-payment or late payment
  • Customer bankruptcy, insolvency or similar legal status
  • Nonpayment following an event outside the control of the buyer or seller

In other words, your business can avoid footing the bill for lost products or time spent if a customer on credit decides not to pay, either intentionally or accidentally.

Work With The Trade Credit Professionals To Grow Your Business

If you’re a business looking to grow and improve your cash flow while minimizing credit risk, work with trade credit professionals at MFE Insurance. Contact a trade credit professional today online or over the phone at 213-266-7990 to discuss how they can help your business grow and thrive.

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Get started today by filling out our Trade Credit Insurance application form!

Trade Credit Application

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4.8
MFE Insurance Brokerage
MFE Insurance Brokerage
4.8
Tara Fartemer
Tara Fartemer
13:34 20 Aug 19
I called MFE Insurance Brokerage about car insurance for my son after seeing the reviews on Yelp. (My son is a student in CA and I live in TN.) Payman explained everything in detail and got a great rate for us! I would definitely recommend him to anyone looking for insurance!
Aaron Godfred
Aaron Godfred
16:55 10 Sep 18
MFE Insurance is great. Omaze has demanding and constantly changing insurance needs and MFE is easy to get in touch with, has a great online cert generator and are awesome people to boot! Highly recommend.
Oscar Bucher
Oscar Bucher
05:25 15 Mar 18
Alec Roberts and his team really go the extra mile to ensure their clients receive the proper insurance that is right for their business at the best price with a timely turnaround. They provided same day service - from quote to a full policy with proof of insurance and helped me win bids and develop my business. They are your allies in the insurance world - look no further!
Jon Keeyes
Jon Keeyes
19:21 13 Sep 17
I've worked with many insurance companies over the years for production insurance on feature films. Once I found MFE, I never looked back. Not only is there pricing competitive (and typically better than many other brokers), Alec and his staff are amazing, quick to reply, and fast to assist. And they make all your insurance needs for production run smooth and easy. I couldn't recommend a better broker.
Ashley Rosenberg
Ashley Rosenberg
22:26 24 Oct 17
AMAZING. Never felt like they were giving me BS information, or quotes that weren't necessary for my production. Always informative (explaining in depth what I would, or wouldn't need for certain situations! Claims were seamless, and the team is always responsive. So grateful to have a broker that really is working for my best interest!!
Ian Bell
Ian Bell
18:03 03 Apr 18
Kat and the rest of the MFE team are amazing. Great communication and quick to find the best possible coverage.
Nick Scully
Nick Scully
20:20 29 Nov 18
John Hart was my broker for my first project requiring insurance, and he was incredibly helpful, professional, and patient with a first-timer. Highly recommend MFE and John's services!
Aaron Brown
Aaron Brown
16:25 13 Sep 17
I've been working with Alec and his team for years. They provide our production insurance and throughout the entire process, including a handful of claims, I've always felt informed, supported, and taken care of. Can't recommend MFE enough - these guys are the ones you want in your corner. They know the best insurance policies and will help manage any claims that arise.
Kate Ryan
Kate Ryan
16:50 08 Mar 19
MFE Insurance saved my business money and offered better coverage. We've worked together over the last several years, and have recommended MFE to family and friends. Alec Roberts and his team are always available to answer our questions or requests, and everything is done in a timely manner. We can't say enough about how well we are treated!
Alexander Baker
Alexander Baker
02:17 26 Sep 20
We were looking for last minute equipment insurance for a film shoot and MFE couldn't have been more helpful. John Hart was fantastic and made sure we got our coverage in time! I could not recommend this company more.
Kyle McKee
Kyle McKee
16:28 01 Mar 22
Been a customer for almost a year. Quick and easy to set up and was able to get a much cheaper price than my "good neighbor" insurance.
Cody Michler
Cody Michler
17:26 07 Jun 22
Peter was great! I did have to cancel temporarily but due to pivoting my business in a different direction. If you have niche and need coverage reach out to them! Its hard to find insurance for specific niches but they got it working for me while I was doing more onsite work!
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