Bad debt (credit) insurance, is it really worth it ?

We insure our cars, our house and sometimes even ourselves – but how many of you have considered insuring the life blood of your business – Your cash flow.

We’re at the coal-face of the credit and debt industry and we have seen a steeped rise in companies failing over the last 12 months.

A recent BBC editorial highlighted the fact that company insolvencies were at their highest since the 90’s and effectively every 1 in 200 active companies closed in 2023.

Frightening statistics ! But what can you do when a customer enters insolvency ?

Credit insurance is like most insurance… it can be costly and you hope you won’t want to use it but when you do, it can be life saving.

Now we don’t profess to being experts at insurance but we have trusted contacts who are. We picked the brains of Tamlynn Siddle at Allianz for her thoughts as to the whys and wherefores of credit insurance and how it all works.

Effectively with the appropriate cover in place, should you suffer the shock of having a customer enter insolvency, in straightforward cases a client can receive up to 90% of their losses back from the insurance company.

Even when you’re experiencing a late paying customer, your insurance can help. For example, if Corp & Comm were retained to recover your account but sadly all of our actions were being ignored (which is rare but we have to admit it does happen from time to time) then after a pre-agreed period of chasing, you can pass this account to your insurers and should they also not be successful, you again could receive up to 90% of the debt value back via the insurance company.

In short, although there are no guarantees that you won’t experience a customer’s insolvency, there are ways that you can avoid feeling the full brunt of that pain.