What do I need to know about business credit insurance?

Credit insurance is a service offered to all types of businesses, whether VSEs, SMEs, ETIs or large groups. It allows them to protect themselves against various problems that can have consequences on cash flow and therefore the development of the latter. In fact, credit insurance aims to act in three phases: upstream with the assessment of the risks of opting for payment on credit with certain customers, but also to recover receivables in the event of unpaid debts and to be compensated. It is therefore essential protection for any company wishing to protect itself against non-payment and which makes it possible to have a real impact on the well-being of the company.

Prevent risks

Firstly, credit insurance will allow prevent risks in terms of non-payment on a case-by-case basis. Indeed, his expertise will make it possible to assess the customer’s ability to pay the amount that has been invoiced to him. This information is valuable for a company since it will allow it to know if it is dealing with a serious customer or not. Indeed, credit insurance services have real experts in the field and will thus allow companies to know the risks they are taking even before establishing an agreement with a potential customer in order to be able to protect themselves. What’s more, bad payers are well aware that credit insurance is formidable to know if they have already made unpaid bills before since everything is recorded in their files and the information will therefore be passed on to all of the company’s customers. ‘assurance. The company will then be able to make its choice knowingly and why not refuse to grant credit or tighten its conditions to dissuade a potential bad payer from not honoring its commitments (more information on the various protections to be put in place place when you are a company on the Entreprise et Compagnie blog).

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Collect debts

Second step in the event of a problem, credit insurance is fully able to recover debts in the event of non-payment and excels in this practice. Indeed, teams that are fully familiar with the laws and legislation in force will be able to act with debtors, which will allow the company to entrust this task, which often requires time and resources, to a professional in the field. Debt collection can be done amicably by finding an agreement that will suit both the company and the debtor if a quick solution is desired, but credit insurance will also be able to support a judicial recovery. At this stage, several options can be considered and the professionals mandated by the insurance service can advise the company on the most appropriate and effective method to adopt depending on the scenario that arises (more information on the subject here).

Compensation in case of non-payment

Finally, if the techniques deployed by credit insurance have not made it possible to avoid unpaid debts, the latter also undertakes to provide compensation which may reach up to 90% of the amount of the unpaid debt. As a result, the company’s cash flow will in any case not be affected by the debtor’s failure to fulfill its obligations.

Credit insurance is therefore a real ally for companies that may have to deal with unpaid bills to allow them to focus on their development rather than taking charge of debtors’ refusals to pay. This is about taking advantage of real support to benefit from tailor-made solutions depending on the case and taking advantage of the expertise of professionals in the sector in order to win your case.

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