Trade Credit Insurance does not always require every customer to be insured.

Some insurers and specialist products can provide cover for selected customers, key accounts or individual large credit exposures.

When can selected-customer cover be useful? #

It may be relevant where:

• One customer represents a substantial proportion of turnover.
• The business has several large strategic customers.
• A particular contract creates a significant credit exposure.
• Most customers can be comfortably self-insured but one or two cannot.
• The business has a concentrated debtor book.

Is selected-customer cover always available? #

No.

Many traditional Trade Credit products are structured around whole-turnover insurance.

Selected-buyer or single-risk arrangements can require different underwriting and may only be available where the exposure meets an insurer’s criteria.

How does the insurer assess the customer? #

The insurer may consider:

• The customer’s financial position.
• Trading history.
• Payment behaviour.
• Industry conditions.
• Country risk where relevant.
• The amount of credit requested.
• Length of payment terms.

The insurer may then offer a credit limit representing the maximum exposure it is prepared to insure, subject to the policy.

Can the credit limit change? #

Yes.

Depending on the policy, insurers can review buyer credit limits as the financial position of a customer or market changes.

Businesses should therefore monitor credit limit decisions rather than assuming that an approved limit remains unchanged indefinitely.