Coverage for Excess of Loss, Trade Credit Insurance Secure Your Trade Credit Insurance Globally!
A commercial organization inherently carries the risk of bad debt. As a business owner, you safeguard your company against such circumstances by providing for it in your balance sheet. The provision for these bad debts is based on accounting principles and your own experience over the years making them predictable. However, what happens if you experience a sudden surge in bad debts? This could happen due to unforeseen circumstances impacting your clients, but the negative effect will influence your creditworthiness. You need to protect your company against losses that go beyond your average allowance for bad debts.
Insurance protection for your business in the above situations can be provided in 2 ways through Dubai Insurance Company (DIC):
DIC’s Excess of Loss policyprovides protection to your company against payment defaults made by your customers wherever they may be in the world. These defaults may be due to the customer being declared insolvent or bankrupt or continuously delayed payment; i.e. protracted default.
DIC’s Trade Credit Insurance pre-defines an aggregate policy deductible which is higher than an expected loss amount; i.e. the policyholder must bear the deductible amount of loss first before DIC becomes liable up to its share which is usually between 70-90%.
If this activity pertains to a single customer, then it is termed as Single Name Credit Insurance
Benefits of excess of loss credit insurance Vs Whole Turnover credit insurance: -
- The Insured can pick and choose the buyers he wishes to protect against
- Once the policy is issued, credit limits are irrevocable as long as Credit Approval procedures in force at the beginning of the policy at the Insured continue to be enforced.