trade credit insurance is marine insurance that indemnifies the insured against non-payment for goods and services by a buyer, due to insolvency of the buyer, delay payment & change of government regulations.
- Commercial risks
- Political risks
This refers to the failure of a buyer to pay its trade credit debts within the agreed credit period, whether due to temporary financial problems or as a result of the buyer becoming insolvent.
This type of risk is faced by companies that export. Examples include the war in the buyer’s country; cancellation of the contract by the government of the buyer’s country; or governmental regulations and restrictions imposed on currency transfer.