Credit Insurance: The bigger they are the harder they fall
Many companies feel they do not need credit insurance for so called big companies, but why is this? Do they feel they are too big to fail? There are many examples where this is not the case and credit insurers have paid huge claims out on large companies.
Who remembers Woolworths, Allders, Blockbusters, Comet, Zavvi, HMV, Jessops, JJB Sports…we could go on. When times change and companies do not adapt they will struggle…that is a fact! When this happens to large companies the fall from the top tends to be much faster and often when they hit the bottom there are casualties that come with it. The obvious casualties would be the employees but what about the suppliers? Unless the suppliers were protected with a trade credit insurance policy from one of the credit insurers the loss could put them in trouble too.
Say you ran ABC Ltd and you signed a huge contract with Woolworths, naturally you'd be ecstatic and rightly so! Woolworths dictates the terms, but that's fine as you know they will pay…the invoices become due but payment isn't forthcoming. Excuse after excuse arrives "this isn't right" "we didn't receive the invoice" "was it delivered?"...and then you see it on the news…"Woolworths have gone in to Administration". That huge contract you signed is now just the cost of developing the products, delivery and wages. From what looked like being your most profitable year is now your biggest loss-making year. Even worse it has put so much strain on your company that you have had to call the insolvency practitioners in.
What is credit insurance? Credit insurance gives you the confidence to know that a claim will be paid out in the event of administration but over and above that, you will get paid 6 months after the due date in any event. Credit insurers underwrite the company's risk. As large companies tend to look good cover is generally available. Now the credit insurers keep in close contact with your clients they will also be the first to know if something is going wrong, giving you the information you need to decide if you want to take the risk.
If you are dealing with a large company and have thought credit insurance isn't necessary don't forget about all the big high street names that have vanished! Compared to car insurance, trade credit insurance is comparable to about 1% of the price with relation to what the credit insurance covers. Get your credit insurance quote from us now.