In today’s competitive business environment, organisations are always on a look out for smart strategies to win customers as well as to retain them. One such strategy is allowing credit to potential / existing clients for goods / services sold. While it is a common practice to allow goods on credit terms to the customers, it also poses dangers of bad debts. Additionally, there is always a risk of political uncertainty when a business is dealing with clients globally which can have an adverse impact on their receivables and hence their bottom-line.

A Trade Credit Insurance policy protects businesses from non-payment of commercial debt. It makes sure invoices will be paid and allows companies to reliably manage the commercial and political risks of trade that are beyond their control. By way of this policy a company will feel secure if they are to extend higher credits to their existing customers or to approach new and bigger customers which they would otherwise hesitate from approaching due to the potential risk of bad debts. This policy assists in giving a boost to a company’s sales and tends to provide a competitive edge to any business. However, it is also important to note that this policy cannot be a substitute for prudent credit management procedures which are the foundation of any professionally run company. Therefore, this policy exists hand in hand with sound credit management practices and complements them.