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Trade Credit Insurance

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Trade Credit Insurance

Trade credit insurance protects your debtors ledger, one of the largest assets your business can carry.

Even the most rigorous and disciplined credit management cannot prevent bad debts, any business with these exposures should ensure they are protected with trade credit insurance. Self-insurance or a bad debt reserve does not replace monies lost, whereas trade credit insurance puts cash back in your hands.

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Commercial Risks

We specialise in offering security and confidence against the following types of commercial risk:

  • Insolvency
  • Payment default

The cost of a bad debt needs to be counted as much more than simply the loss of money you were due to receive. The truth is you can never make up for the cost of a bad debt. The impact is immediate, it can put stress on your cash flow and will certainly damage your profitability. Ask yourself now what would be the consequences of one of your largest customers failing to pay you?

For most businesses, the value of the debtor’s ledger, the money you are owed, is one of the largest assets and yet it is often uninsured. Other important business assets are insured usually without question, yet the risk to a business of customer insolvency is perhaps one of the most volatile exposures.

We are committed to providing the most appropriate cost effective trade credit solutions for all our clients. We guarantee service delivery through our knowledge and expertise of the trade credit insurance market in a range of industries. This is backed by our well established relationships with insurers and our ability to think laterally.

Export and Political Risks

We offer full protection for our export clients. Export and political credit insurance is the safest option when an overseas buyer does not want to establish a Letter of Credit, and wishes to trade on an open account or Documentary Collection basis. We specialise in offering clients security against the following type of export and political risks:

  • Contract frustration due to war or riots
  • Inconvertibility of currency
  • Cancellation of import/export licences
  • Default by Government-owned buyer
  • Contract cancellation by buyer’s Government

Benefits

We can help you sleep better tonight, consider the following:

  1. Preserve your profit

    On average about 40% of a company’s assets are from the debtors ledger, a significant part of your business that should be protected. A bad debt reserve is not the answer. It won’t put cash back in your hands.

  2. Protect your liquidity and cash flow

    Apart from the long-term loss of a customer and future revenue streams, there is the immediate effect on cash flow, which could even lead to your own business failing. The proceeds of a credit insurance claim injects liquid funds back into your business. We can arrange a virtually unlimited cash reserve for the balance sheet at a planned deductible cost.

  3. Confidence to expand

    You can grow your business in confidence knowing that the cost of potential customer failures is already covered. You can also be more aggressive in your sales and marketing by extending higher and longer credit terms with your customers.

  4. Strengthen your credit management

    Whether you trade with customers domestically or internationally, your customer’s status can be affected by internal and external factors, unknown to you. No matter what credit control procedures you have in place, you can further enhance the quality of decisions made on credit limits by working closely with us and gaining access to our extensive knowledge database. You can spend less time worrying about venturing into new markets or territories and be ‘in the know’ about the customers you are dealing with.

  5. Add security

    Protect your debtor’s ledger and gain access to more efficient financing. Banks recognise trade credit insurance as collateral security when providing financing for local or overseas sales. Your shareholders can also appreciate that their assets are being well protected and that financial corporate obligations are being met.