Trade Credit & Political Risk


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    Trade Credit & Political Risk 

    Accounts receivable may be an organization's most important asset. Current events have proven that even the strongest companies can implode — leaving suppliers with large, sometimes unsustainable, bad-debt losses.

    Gallagher Financial Products can tailor an insurance product that can help you not only protect but also grow cash flows by:

    • Transferring credit risk
    • Supporting sales growth
    • Enhancing borrowing capacity
    • Improving open credit terms with suppliers

    These policies can be written to cover one or all of your debtors, and can provide anything from full indemnity to simple umbrella protection. Gallagher’s market relationships and extensive network of professional staff will help find a solution that enhances your business operations. We help protect your assets, your bottom line, and ultimately the stakeholders of your company.

    Coverage Solutions/Trade Credit & Political Risk (objID=5636) TO Coverage Solutions/Financial Products/Trade Credit & Political Risk (objID=5792)  

     Q: Do we have to insure all of our accounts to obtain a trade credit risk policy?

    No. We help you design a policy that meets your needs. Gallagher Financial Products represents dozens of credit risk insurers that can offer variations of single-buyer coverage, key debtor policies and whole turnover protection. We will present options and recommendations to help you make an informed decision.

    Q: Who handles collections if I purchase a policy?

    Your credit department will continue to handle collections, but now they will have major insurers as a resource in making credit decisions.

    Q: What does it cost?

    Your premium — which is calculated upon completion of an application — is determined based on a number of variables, such as the insurable sales, which deductible you select, conditions of payment, the trade sector and the spread of buyers you wish to insure. Rates typically range from $0.10 to $0.85 per $100 of sales.

    Q: What perils or causes of loss are covered?

    For domestic sales: typically insolvency, non-payment and even pre-shipment.

    For export sales: all of the above plus political risks such as currency inconvertibility, non-transfer, embargo, confiscation, import/export license cancellation and others, depending on the country of risk.

    Q: What information do I need to provide for an applicatiom, and are we able to secure non-disclosure agreements?Insurance underwriters will review your basic financials, accounts receivable aging and bad debt loss history. They will also review your customer mix and desired credit limits. Non-disclosure agreements are common.

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