As concerns about a US recession grow, so does the demand for credit insurance. What is credit insurance, and why do so many businesses want and need it?
Here’s what every company should know about credit insurance – and where to turn for help.
What is credit insurance?
Credit insurance is a financial tool that protects you against having a bad debt because your customer cannot pay you. In a recession or other period of economic hardship, the number of bankruptcies skyrockets, increasing the chances that you will suffer a bad debt. Credit insurance acts as a safety net against this increased risk, protecting your business so that you can stay afloat even when times are hard.
How do I know if my business needs credit insurance?
Credit insurance is the right fit for many businesses, but not for all of them. Before you purchase credit insurance coverage, ask the following questions:
- Is the cost of credit insurance worth the protection it provides for our business?
- What types of losses are covered under a credit insurance policy, and what types of losses are excluded?
- Can credit insurance help me sell more, and/or enhance my bank financing program?
Credit insurance policies are able to be tailored to your needs, so it is important to work with a knowledgeable broker to arrange an effective program for you. In addition, your broker can assist you in comparing terms, in making sure you understand what is and is not covered, how the policy works, and how payments are to be made.
Where can I find more information about credit insurance?
Coverage for business losses comes in many different forms. The options available give businesses flexibility in addressing coverage, but they can also lead to confusion.
An experienced insurance broker can help you determine whether credit insurance is the right fit for your business. If credit insurance isn’t right for you, your broker can help you find the coverage that is.
Looking for an experienced insurance broker?
If you’re looking for ways to protect your business in the face of an economic downturn, talk to the team at Odell Studner today. Our experienced insurance brokers can help you ensure you have the right coverage for the risks you face. Contact us today to learn more.