Trade credit insurance protects businesses when their customers fail to pay them as agreed. When money is limited, the first temptation for many businesses with regards to insurance will be to keep their premiums as limited as possible. However, this may result in leaving the business’s critically important cashflow unprotected. Trade credit insurance can prevent cashflow interruptions from seriously damaging your business. While often perceived as overly expensive, the price of trade credit insurance depends on a variety of factors, and can provide critical protection against otherwise serious financial harm.
Key Takeaways:
- When many businesses want to choose an insurance policy, instead of looking at the features of the policy, they depend on how much the premiums cost.
- When a business places an unnecessary priority on minimizing the premiums that it pays, it means that cashflow has to be protected by the business.
- Businesses can protect themselves against risks such as the risks that their creditors do not pay by taking trade credit insurance.
“Business owners could be failing to insure the very thing their business relies on to survive, namely cashflow.”
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