Bad Debt Protection

Bad Debt Protection (also known as Credit Insurance) is designed to protect businesses from specific losses. In the case of Bad Debt Protection, the losses arise from the failure of debtors to pay as a result of their involvement in insolvency procedures.

Insurance companies specialising in Bad Debt Protection will normally provide protection up to 90% of the net invoice amounts (net of VAT) up to the value of specific credit limits. Some Invoice Financiers will offer Bad Debt Protection for their factoring and invoice discounting products on a Non–Recourse basis, where they will take the risk relating to bad debts and protracted payment default against approved customers.

Available for both UK and overseas markets, Bad Debt Protection can be provided on a Whole Turnover Basis covering all debtors, or on a Selective Debtor basis - and the appropriate level of cover will depend on the credit limits that the insurance company is prepared to write on customers. Cover is normally specific to the individual customer who is entering into an insolvency procedure, although some policies will cover protracted default by the customer.

Bad Debt Protection does not normally provide cover for sales to associated companies, local or national government authorities, and private individuals. Neither is cover available for non-payment due to disputes such as product quality problems or service issues.

We are in regular contact with a number of organisations that provide comprehensive and competitive Bad Debt Protection that can be tailor-made to individual business needs.