Trade Credit Insurance Vs Bad Debt Protection 

Bad debt protection

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Is the risk of your new customer defaulting on payment terms keeping you awake at night? 

Perhaps you have received your biggest order ever from an existing customer, but you are nervous about that level of exposure?

Maybe you have considered Trade Credit Insurance or Bad Debt Protection with your bank/funder and are unsure which option to go with?


Let’s take a look at the options and compare Bad Debt Protection vs Trade Credit Insurance: 

 Trade Credit Insurance Bank/ Invoice Finance Bad Debt Protection 
Covers losses occurring from customer insolvencyYes Yes 

Covers Protracted Default

(when a solvent company pays late or fails to pay at all)

Yes No 
Covers International customersYes Yes 
Direct access to insurer/cover providerYes No 
Risk information on financial stability of your customersYes No 
Whole Turnover PolicyYes Yes 
Single Invoice PolicyYes No 
Single Risk PolicyYes No 
Agreed Accounts PolicyYes No 
Pre-Credit Risk CoverYes No 
Tailored Policy to cover the way you tradeYes Yes 
Can only be in place if you have an Invoice Finance facilityNo Yes 
Policy Run offYes – if Risks Attaching No – as Losses Occurring  
Account manager focussed only on your bad debts cover/insurance and not finance facility as wellYes No  


What does this all mean?

The best trade credit insurance policy offers predictive protection by providing credit data and intelligence designed to help companies improve their credit-related decision-making and credit management. 

This in turn can save staff time and resources you would have spent on accounting processes and on the collection of the debts. 

The goal is to prevent losses from bad debt. 

No company can avoid bad debt entirely, the trade credit insurance policy is in place to cover losses that occur. 

Not only are you protecting your business against future losses, the added intelligence assists with your pursuit of growth. 

Trade Credit Insurance provides businesses with protection against failure and substantial delays in receiving payments.  What may seem catastrophic at first is bearable with a policy structured to fit your business requirements.

For any Trade Credit enquiries, contact one of our experienced brokers today

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Our primary objective is to connect business owners with the right broker that can best handle their needs. We want to make this process as simple as possible so you can get back to running your business.

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