Questions About Trade Credit Insurance
We answer the most common questions about our trade credit insurance.
Q: What are the eligibility requirements?
A: A: To be eligible, your business must be in operation for at least 6 months and sell business-to-business. Trade credit insurance is particularly ideal for businesses with annual revenues of at least $500,000.
Q: How does the Trade Credit Insurance offered through RBC Insurance differ from similar policies offered by other carriers?
A: Trade Credit Insurance offered through RBC Insurance gives small business owners vital protection against buyer insolvency without adding more time-consuming administrative tasks. No buyer credit approvals are required, nor is monthly reporting.
With Trade Credit Insurance, small businesses will have the same access to world-class risk management specialists that our larger clients enjoy.
Q: My export business sells to end-users. Can I purchase this insurance?
A: Unfortunately, no. Only business-to-business organizations may purchase Trade Credit Insurance.
Q: I already have a business insurance package to protect my company. Does it include trade credit insurance?
A: Trade credit insurance is a highly specialized coverage that business insurance packages typically do not include. However, it can compliment any package you currently carry.
Q: Will trade credit insurance reimburse all my uncollectible receivables?
A: It will reimburse most of an undisputed invoice or account receivable which remains unpaid.
Q: How are premiums calculated?
A: As a rule, typically trade credit insurance premiums are calculated as a percentage of company sales.
Q: How are deductibles calculated?
A: As a rule, we base trade credit insurance deductibles on several factors, including your business's accounts receivable losses in previous years. However, there is no deductible for small businesses. When you call RBC Insurance at 1-877-917-6925, we can connect you with a commercial insurance specialist who can determine if your business qualifies as a "small business."
Q: What are the exclusions?
A: The exclusions include:
- If a buyer has outstanding invoices that are overdue beyond the agreed collection period, only those invoices are covered. Any new invoices from that buyer would NOT be covered.
- Trade disputes, such as disagreements over the quality of goods received, are not covered.
- A transaction that occurs outside of the normal terms of trade (such as a customer that requests an exception to your regular collection period) is not covered.
Q: My worldwide export business has just a few large customers, scattered in several different countries. How can trade credit insurance benefit me?
A: Would your business be in jeopardy if one of those large buyers could not pay you? Trade credit insurance reimburses most of an undisputed invoice that is unpaid due to political risks such as transfer risk and currency inconvertibility.
Q: My business is just 9 months old and at the moment we only accept credit terms and COD payments. How can trade credit insurance benefit me?
A: New business owners may have to balance their need for liquidity with their need to be competitive. When you carry trade credit insurance, you can confidently offer your buyers better credit terms and higher credit limits—helping you increase sales and remain competitive.
Q: We sell to many businesses on credit. How does trade credit insurance help me manage my risk?
A: Trade credit insurance may provide you with analysis and advance warning of troubled companies or industries. Armed with this information, you can avoid buyer default situations before you have to make a claim.
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