What is the purpose of credit insurance?
Credit insurance can protect companies against defaults by their customers and the resulting liquidity problems. It provides financial protection in the event that invoices are not paid, thus safeguarding the company’s liquidity.
What are the benefits of credit insurance?
Protection against non-payment: Thus, credit insurance provides financial protection in the event that one of the customers does not pay its invoices.
Liquidity protection: the company protects itself against liquidity shortages that can arise from unpaid customer invoices.
Who might need credit insurance?
Payment by invoice has become commonplace in Switzerland. However, whether in the B2B or B2C sector, it represents a potential risk for the company.
The company has to pay various costs such as material, personnel and other costs while it collects the money. In some cases, customers don’t pay either.
This can quickly put businesses at risk. The easiest way to ensure their survival is credit insurance.
How can you reduce the risk of customer insolvency?
To avoid any consequences that could harm the health of the company, the insurer offering credit insurance will perform a credit check on customers to limit the risk of non-payment.
Text written by Enver Kutlu