Trade Credit & Bonds

Trade Credit & Bonds Insurance Queensland

All forms of trade involve 'Credit risk'. From the point of view of the supplier, many companies deal on credit terms with purchasers within their county of domicile and also overseas. Particularly in the current economic situation, it is not unusual for suppliers to find themselves facing customers who are insolvent, default on payments, act fraudulently or are unwilling to accept the goods on arrival. The effects of a major debtor's insolvency or protracted default on a payment can be potentially devastating to any business and may:

- cause a reduction in profit; or
- result in considerable legal expense in recovering the amount owed or goods.

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Who needs Trade Credit & Bonds Insurance?

Whether you’re a major international distributor or a small specialist manufacturing business, the impact of suddenly being exposed to bad debt could be devastating and can take even large organisations to the brink by starving them of vital funds.

What does Trade Credit & Bonds Insurance cover?‍

Trade/Credit insurance is designed to ensure that a company is not adversely or fatally affected by the unforeseen failure of a customer (or customers), but also as a management tool to the flow of business decisions.

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The key benefits of Trade Credit Insurance include:

- Protection of receivables – non-payment of a debt owed by a client exposes a company to a high risk that could lead to a loss of profitability and harm cash flow
- Assistance in managing credit risk – The credit Insurers extensive database and knowledge on both local and international businesses help in the management of client credit
- Cost saving – By using Trade Credit Insurance, companies save expenses such as: information, analysts, collection expenses, provisions for bad debt etc
- Leveraging credit insurance for financing needs – Financial institutions look favourably on securing a company’s receivables, some of the benefits include increased financing for the policyholder, comfortable financing terms and improved financing ratios on the balance sheet
- Increasing revenues and profitability – Credit insuring both local and international clients often contributes to increased sales that would not necessarily be conducted in the absence of credit insurance. Credit Insurance in some cases allows businesses to sell on extended terms and to sell to customers that they had previously not sold to due to a lack of information on that business; and
- Access to professional debt collection services – As part of most policies Credit Insurers contribute to the cost of debt collection for insured debts.

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Trade Credit & Bonds Insurance Advice‍

From the purchaser’s perspective, the contract of sale should be specific if the date for shipping goods is vital. A letter of credit can specify a latest shipment date and if this is not met, this may allow the importer clear legal grounds for refusing payment.
For purchasers, another safeguard when dealing with a new supplier is to thoroughly investigate their reputation and standing prior to orders being placed. Where a purchasing agent is used, similar checks and close supervision may avoid later costly mistakes or issues. An independent superintendence company to inspect the goods prior to shipment may be advisable, and will establish if there are any problems at an early stage, when the issue is less expensive to rectify.

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Trade Credit & Bonds Insurance Brokers

Our Brisbane Insurance Brokers can help you get the right insurance cover by assessing your specific needs and recommending the best value insurance solution for your business, whilst still maintaining the highest standard of cover.
Contact us today to get a Trade Credit & Bonds Insurance Quote.

Information Source

https://www.lmigroup.com/RiskCoach/GeneralInfo.aspx

https://www.pscconnect.com.au/business-insurance-products/trade-credit-insurance/

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Befor Pty Ltd ABN 94 672 803 646 | CAR 1309635 trading as Hunter Broking is a Corporate Authorised Representative of Resilium Insurance Broking Pty Ltd ABN 92 169 975 973 | AFSL 460382.

The information on this website does not take into account the objectives, financial situation or needs of any person. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs.

We subscribe to and are bound by the Insurance Brokers Code of Practice, a full copy of which is available from the National Insurance Brokers Association (NIBA) website, www.niba.com.au

General contents with set limits	Limit	Option to increase limits?
Jewellery, or items containing gold or silver	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Watches (except smart watches)	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Cameras and photographic equipment and accessories	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Collections or sets, like stamps, memorabilia, documents, medals or coins	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Pictures, paintings, works of art	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Antiques or Oriental rugs	up to $10,000 for each item, set or collection, up to 25% of the unspecified contents sum insured in total, unless items have been specified
Commercially recorded or downloaded media content, including audio, video, phone or tablet applications and games	$2,000 in total
Spare parts or accessories (excluding keys) which are not fitted or being used for the following: motor vehicles farm vehicles caravans and trailers watercraft aircraft	$4,000 in total
Money, cheques, and other negotiable instruments	$2,000 in total
Contents intended to be kept outside, like Your barbeque, outdoor furniture and children’s play equipment.	$10,000 in total
Contents in a locked storage cage in the basement of a strata title development at the insured address	$5,000 in total
Laptops, tablets, mobile phones, portable computers and their accessories (see optional Listed Portable Contents cover on page 48 for ways to increase limits on these items)	$3,500 per item
Smart watches and other wearable technology	$1,500 per item
Drones and other remotely or autonomously piloted aircraft (covered only when not in use and not used for business).	$1,500 per item

Contents used for business
Specific equipment used for business, trade, or professional purposes, including: computers, hardware and software tools or musical instruments photographic equipment	up to $10,000 in total
Stock for business, trade or professional purposes.	$5,000 total