Does my business need credit insurance? The answer is of course: hopefully not. However, careful cash flow management is a major component of every successful business and sometimes it can be completely out of your hands. With so many uncertainties in the business world, clients being unable to pay for your goods and services can create a knock-on effect that pulls everyone involved down.
So what is business credit insurance? Just as businesses can take out insurance to protect its equipment, staff and property, it can also take out insurance to protect its account receivable.
Credit insurance is largely to cover your business against the failure of customers or clients to pay you for your goods or services. When needed, a credit insurance policy can keep your business completely out of harm’s way from unforeseeable bad debts and keep confidence in and around your business model.
Bad debts can chip away at the profitability of a business of any size, and until recently has not been an affordable option for many small businesses. Recently, new flexible policies have seen companies be able to customise and tailor their insurance completely to their needs, meaning that a wide and expensive blanket credit insurance is not necessary for companies at different stages of their growth.
New style credit insurance policies can focus on particular aspects of your accounts receivable department, whether it be for a team of 20 people or something that the MD looks after on their own. They can offer you uninterrupted cash-flow in the case of non-payments so that your budgets and your predictions remain intact and investors and shareholders see things running as predicted.
In a unstable economy business credit insurance is becoming an absolute must. UK based companies such as Bluefin offer business credit insurance that can give your company protection against defaulted payments, customer insolvency, political risk and offer a varying scale of how much of a total debt you wish to be covered. They can be on hand to evaluate potential risks and offer daily specialist support to ensure that your business remains unaffected by any problems that your clients or associates may be having. Credit insurance policies are now so flexible that they can be customised to highlight specific clients and even give you complete control over when the policy will kick in and pay out.
While no one wants to think that their clients or customers would have trouble paying for goods or services, the realities of a tough marketplace and a worldwide unstable economic climate mean unfortunately that many businesses go bankrupt or find themselves in difficult situations where cash-flow becomes impossible. The easiest way to keep your business out of the domino effect that these problems can cause is through credit insurance. Don’t let another business’problem become your problem; protect yourself with a credit insurance policy.
Bluefin is one of the UK’s leading independent insurance brokers, providing specialist insurance and risk management services to individuals and businesses. It provides market leading insurance solutions delivered locally through a network of 42 offices and over 1400 staff.
