Credit insurance can be purchased by any type of business, large or small. However, the larger the corporation, typically the higher premium they will pay for this type of protection. Naturally, companies that rely on selling their products and services to customers who then purchase on credit will benefit most from having a form of credit insurance in place. Companies that sell their goods and service “cash-and-carry” usually do not consider this type of coverage because there is no risk associated with unanticipated debt problems.
Organizations performing work under government contracts or construction projects may also enjoy better rates than other organizations due to the nature of these types of projects. Risky industries such as gambling casinos and airlines also tend to have higher premiums because of fluctuating accounts receivables due to economic conditions or other factors.
Credit insurance is typically purchased for 12 months and can be renewed each year if the policyholder satisfies all underwriting qualifications. The premiums are based on several factors, including industry, company size, account receivables turnover, and individual credit scores. Reviewing your company’s specific needs with a qualified agent or broker is required to ensure you have an adequate amount of coverage to meet your budget.