Trade Credit Insurance | Insurance Broker & Risk Management

As an Australian business owner, giving your customers the option to pay their final bill on open credit terms can leave you vulnerable.

Trade credit insurance safeguards your enterprise against the commercial risks of a customer failing to pay, as a result of financial trouble, default, or insolvency. It protects your cashflow if you have already delivered the goods or services as the insurer will step in to pay you instead.

Trade credit insurance ensures no single debt significantly impacts your business operations, so you can continue to give your customers flexible payment options with the confidence that your bottom line won’t be affected. Contact Us

What is Trade Credit Insurance?

Trade credit insurance is a specialist business policy designed to manage and mitigate accounts receivable risk. It protects you when you allow customers to pay for goods or services on 30,60, or 90-day credit terms. The insurance covers a substantial amount of the money your business is owed in the event your customer is unable to pay.

Who Needs Trade Credit Insurance?

Any Australian business is vulnerable to customers being unable to reconcile their debts. Nevertheless, there are certain companies with a higher risk profile that may benefit from protection more than others.

You should consider trade credit insurance if your business:

Sells on Credit Terms: You offer payment terms where you aren’t paid instantly, such as 30, 60, or 90-day pay windows.
Wholesales or Manufactures: For businesses who supply large orders of stock or materials upfront before requesting payment.
Exports Goods: If you trade with international customers and buyers where different local laws or physical distances makes collecting debt and communication more difficult.
Relies on a Few Large Clients: If a substantial amount of your sales comes from a few large buyers, it just takes one of them for your business to face a significant hit.
Is Growing Quickly: For companies expanding at speed, who may not know the financial histories of their buyers, could face increased exposure with credit terms.

Covered by Trade Credit Insurance

Customer Insolvency: If your buyer becomes insolvent, such as filing for bankruptcy, entering administration or closing down.
Late Payments: The customer is still open for business but is late or failing to pay an undisputed invoice on time.
Export/Political Risk: If an incident occurs overseas, such as a war or a sudden change in law, that prevents the payment from being made.

Not Covered by Trade Credit Insurance

Disputed Invoices: If there is an unresolved dispute, such as a customer refusing to make payment due to a product defect or issue with the service, this won’t be covered.
Old Bad Debts: The policy can’t be applied retrospectively, so if payments are missing before you purchased the policy, these debts can’t be recovered.
Breaking Policy Rules: If a sale went over the pre-approved credit limit that is outlined at the outset by your insurer, trade credit insurance won’t cover the excess.

What It Covers – And What It Doesn’t

While a comprehensive policy allows you to operate your business with increased confidence, it’s important to be aware of what your policy does not cover, so you know where your gaps in coverage exist.

How Trade Credit Insurance Works

Trade credit insurance is not just coverage you buy and forget about – it is a long-term safety net that allows you to trade safely every day. The process entails:

Checking Your Customers

With a specialist broker, they will work with your insurer to look at the financial history of your current and new buyers.

Setting Credit Limits

The financial health of your buyers will inform the insurer how much credit you can safely allow for each customer under your tailored policy package.

Trading Safely

It is business as usual – you continue to ship your goods and send out invoices, with the peace of mind your sales are backed by insolvency coverage.

Getting Paid If Things Go Wrong

In the event that a customer does go under, you make a claim to the insurer, who will first attempt to collect the debt. If issues still persist, the insurer will pay you a substantial portion of the missing payment.

Benefits for Your Business

This coverage does more than reconcile your debt, it allows your business to run smoother and grow faster:

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Safe Cash Flow: Protect your bottom line by not worrying about a massive unpaid invoice affecting cash flow.
Grow with Confidence: No need to take on scary risks through safely providing higher credit limits to your current or prospective buyers, depending on their financial health.
Easier Bank Loans: Having insured invoices means banks and finance companies are more likely to lend you more money, often at lower interest rates.
Safer Exporting: Your business can grow in foreign markets, with less exposure to foreign trading risks.

Testimonials

Trusted by Businesses Across Australia

Our clients rely on us for strategic advice and dependable support.

We’ve always have such a great experience with Barrack Broking. Our Account Manager, Dale is incredibly friendly, easy to deal with, and genuinely attentive to everything we need. Nothing ever

David Heffernan

thanks again Dale and Barrack for making the insurance renewal process so smooth and timely yet again

Scott

Had a great experience with Barrack Broking – Insurance Brokers Brisbane. The whole process was smooth, professional, and easy to understand. A big shoutout to Amiel – absolute superstar. He

Lucie Heinzelmann

Competitive premiums offered. Great service going over and above. I have peace of mind knowing the insurance policies are looked after by a wonderful highly experienced team. Can not be

Marcella Herdsman

Excellent Communication, and provide great options and competitive Premiums. Just a pleasure to deal with. Highly recommend this team to any business owner.

Darren Harmsworth

Extremely attentive, took real time to understand the business and saved us a considerable amount on our premium – highly recommended

Belinda Brown

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As all businesses operate in an uncertain world, Barrack Broking is dedicated to delivering strategy, ideas and certainty to protect your business.

Trade Credit Insurance for Australian Businesses