Whole Turnover Credit Insurance Policy
This type of Credit Insurance policy is designed to cover your entire turnover against insolvency and default. Policies are usually structured with an excess of £500-£1,000 and many underwriters are now offering fixed premiums inclusive of credit limit charges as well as an integrated collections facility.
Specific Account Credit Insurance Policy
A policy designed to cover a single customer, which in many cases is the largest account on the ledger. Most policies cover insolvency only and an “indemnity” is applied to the credit limit granted, usually 80-90%. This type of Credit Insurance policy is not designed to cover a customer where there is perceived to be a higher than average risk.
Key Account Credit Insurance Policy
This type of Credit Insurance policy covers a selection of between 2 and 20 of your key customers, usually the largest accounts on the ledger. These policies usually cover both insolvency and protracted default and an excess would apply.
Catastrophe Credit Insurance Policy
This type of Credit Insurance policy is designed to suit companies with turnover in excess of £10 million who have in place effective and sophisticated credit control procedures. The insurer will normally underwrite the company’s credit control procedures and will seek a greater share of risk with the policyholder. This is normally via an Annual Aggregate Deductible, in excess of which claims are payable. The deductible is usually set at a level of at least £25,000 and more commonly at £50,000 – £500,000.