Trade Credit Insurance
The full range of risks your business may face can now be covered by Chesneau’s insurance solutions.
WHY SHOULD CONSIDER TAKING OUT TRADE CREDIT INSURANCE ?
Companies are currently operating in a very unstable geopolitical context, both in Europe and the rest of the world. They are exposed to inflation, and increasing costs of raw materials and energies. Companies’ treasuries are impacted as payment periods are extending.
In addition, special allowances implemented by the French government have ended and the “PGE” (i.e. loan secured by the government) must now be reimbursed.
The consequences may be hard to overcome for you and your clients and a customer default can have a significant impact on your profitability.
It is important to take out trade credit insurance adapted to your business to ensure protection against debtor default.
The trade credit insurance solution will allow your business to transfer (to an insurance company) a risk that may represent 25% to 30% of your balance-sheet assets.
THREE TOOLS AT YOUR DISPOSAL
PREVENTION OF NON-PAYMENT RISK
This involves evaluating and monitoring the financial condition of companies beforehand. A trade credit insurer covers commercial and political risks.
If your client is unable to pay, the amicable and legal settlements of disputes are borne by the trade credit insurer.
COMPENSATION FOR UNRECOVERED DEBTS
In case of unrecovered debts at the end of the waiting period determined by the insurer, the loss is compensated as per the percentage defined in the policy.
ACCOUNT RECEIVABLE FACTORING
Factoring is a financing tool for companies: it is a way of receiving a cash advance of the payments owed by corporate clients before the due date. This financing solution uses your outstanding invoices as collateral.
As part of a factoring agreement, the company receives a cash advance and transfers the management of its trade debts collection and receivables to the factor.
There are various factoring solutions depending on the type of industry or the needs of companies.
SURETY BONDS AND GUARANTEES
A surety bond is a guarantee from a financial institution to compensate the beneficiary in case of failure from the contractor to meet contractual or legal obligations.
Insurers’ solutions can be used as an alternative to bank bonds so that your credit lines will not be affected.
Different types of guarantees:
- Market guarantees often called contractual: construction, manufacturing.
- Legal guarantees: home builders, environmental, customs, excise (wine/spirits), food-processing, and temporary work.
OUR FIELDS OF EXPERTISE