How Credit Insurance Helps the Distributor

An Authentic Report in regard to Specialized Insurance for the Distributor

A standard business insurance policy usually consists of general liability, including fire and workers comp coverage. What many may not realize though is that there is protection beyond the typical that a business may be in need of.

An insurance specialist affiliated with an independent agency highlighted this chain of thinking to a client once.

“Do you realize,” he began while engaging the man, “there is insurance that can cover a business risk from A to Z! Our agency is especially tuned in to finding all-encompassing coverage for specific risk exposure that we may note in a particular company or organization. Businesses would be surprised at the extent of coverage actually available.”

Then the insurance agent continued with a light discourse about the client’s father’s distributing business and how credit insurance can help those in the industry.

Unlike others that use an immediate payment system in business, the distributor often allows those he deals with to postpone payment. The credit system may be necessary to retain his customers, but in the event a merchant that takes advantage of the payment mode does not end up paying, the distributor can find himself in deep trouble that may lead to financial ruin. After all, the nature of the business relies on cash flow: the distributor uses the payment he receives from the vendors to purchase more merchandise; without money to do this, the business may be destined to a partial or complete standstill.

If a distributor has credit insurance, however, there is protection against the failure to pay risk. Should a distributor be faced with non-payment, the coverage will cover his bills! Furthermore, credit insurance (also known as trade credit insurance) offers numerous other advantages.

Credit Insurance allows the distributor to:

• Continue selling to regular customers and increase business through new customers, regardless of the possible payment risks that may be
• Cultivate more customers
• Have access to business monies
• Benefit from enhanced lending terms offered by banks
• Receive tax breaks from paid credit insurance premiums
• Use offered info and risk management that comes with the credit policy to aid in credit loss prevention

After listening to the insurance specialists lesson about credit insurance, the client made the connection with another distributor. As is generally the case, this distributor was worried about credit risks. Following an analysis of his business and the inherent exposures he had, the man decided to go for the related coverage, customized to his needs.

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