Trade credit insurance: protects you against default payments

Credit insurance (also known as trade credit insurance, bad debt insurance, debtor default insurance or del credere insurance) is a solution that protects companies against the risk of outstanding receivables, late invoice payments and customer insolvency.

In the event of a payment default, Coface pays compensation that cushions the loss and secures the company's liquidity. Credit insurance is therefore a type of payment default insurance for companies.

Credit insurance enables you to acquire new customers without having to worry about whether they are actually solvent.

It also gives you easier access to outside capital as your liquidity is secured, which increases your creditworthiness.

What's more, if you have taken out credit insurance, you no longer have to worry about the hassle of managing receivables and chasing up your customers - we will take care of that for you from now on.

Credit insurance covers three main areas that ensure that the risk of non-payment is minimized: 1. prevention of outstanding receivables, including checking and monitoring the creditworthiness of your customers, 2. receivables management, 3. compensation if a customer does not pay.

Yes, credit insurance protects against non-payment - if customers do not pay individual invoices or become insolvent.

In addition, payment defaults are avoided in advance thanks to the information we provide about your (potential) customers and their creditworthiness.

You simply submit an request for your customers to be checked via our online platform CofaNet. As soon as you receive confirmation from us that the credit check has been successfully completed, you can do business with these customers with peace of mind.

We monitor the solvency of your customer base on an ongoing basis and inform you if the creditworthiness of a particular customer changes.

In the event of a payment default, simply enter the information via CofaNet and we will immediately take over the debt collection process - regardless of whether the business partner in question is based in Switzerland or on the other side of the world. If the collection procedure is not successful within the contractually agreed period, the corresponding insurance benefit will be paid out to you.

Export credit insurance is another term for credit insurance, but refers specifically to cover for your outstanding receivables abroad.

Coface is directly represented in over 100 countries and covers a further 95 countries through its extensive network. This makes us the ideal partner for export credit insurance.
 

If your client is pleading a commercial dispute to avoid paying you, our collection managers will check that they are not acting in bad faith in order to conceal their inability to pay. If the dispute is real and bona fide, we will simply suspend our collection process while we let you settle the dispute within the context of your customer-supplier relationship. The guarantee is reactivated once the dispute has been resolved, and the invoice can be indemnified if the customer is unable to settle it. 

In international trade, companies can also secure receivables through a documentary credit (letter of credit). In certain cases — for example, when covering a single large transaction with an unknown trading partner — this can be a useful instrument.

However, in most situations credit insurance is more attractive for companies: it is generally less expensive, more flexible, and involves significantly less administrative burden than a letter of credit.

Whether a payment default results from political events (wars or international sanctions), natural disasters, customer insolvency or bankruptcy, or commercial disputes, Coface credit insurance provides comprehensive protection for your business.