Frequently Asked Questions

What is Credit Insurance ?

Credit Insurance, also called accounts receivable insurance, provides your business with protection against the failure of your customer to pay its trade debts. This can arise because your customer becomes insolvent or because your customer fails to pay within the set timeframe. These risks are usually described as commercial risks.

What credit terms can be protected ?

Business Credit Insurance is for short-term trade account receivables, those due generally in less than six months, except special cases.

Who uses Credit Insurance ?

Any business selling on open account terms to other businesses can benefit from Credit Insurance.

Why should I consider Credit Insurance ?

On average, 40% of a company’s assets are in the form of trade debts. Sometimes the figure is far higher. It is very difficult for a company to predict which client will default on payment. Close to 50 % of all payment defaults arise from debtors with whom stable and long-term trade relationships have been established.

The cost to a business of non-payment can be considerable. For example, if a company’s profit margin is 5 % and one of its customers defaults on a debt of € 50.000, the company will have to produce additional sales of € 1.000.000 to make up for the lost profits. More importantly, the lost cash flow could be devastating. Non-payment weakens your company and lowers its investment capacity. A Credit Insurance policy helps in the management of your sales ledger and compensates you in the event of non-payment.

Can I cover just the accounts I am worried about ?

No insurance program can work over the long - term if only the weak clients are covered. But more specifically, no one can accurately predict when a company may fail. Euler Hermes Emporiki underwrites on a whole turnover basis. This provides the biggest value to its clients and supports a long-term relationship.

What are the benefits of Credit Insurance ?

There are many benefits including: Better credit control and protection against catastrophic bad-debt losses ; Safe sales to new and existing customers ; Improved working capital from your lender,because you have enhanced the quality of your accounts receivable with credit insurance ; Improved cash flow, because you receive payment for unpaid accounts receivable that are insured.

How much does Credit Insurance cost ?

Premiums are calculated as a percentage of your sales. This rate can vary depending on the trading history and historical debt loss of your company, your trade sector, and your customer base. The majority of businesses will find Credit Insurance to be highly cost - effective, even before taking into account the many additional benefits in the areas of sales development, risk and credit management, and bank financing.

What is the level of indemnity ?

The level of indemnity typically ranges from 60% - 80%; however, the level varies depending on the policy you select, your experience, your accounts receivable portfolio and your premium target.

What if my company hasn’t experienced credit losses ?

Regardless, unexpected losses can come from even your most reliable accounts. Credit Insurance provides a financial safety net against the unforeseeable events and trends that can affect both you and your customers. While you can control your own credit process, you can’t control your customer’s cash flow. If they are impacted by the bankruptcy of one of their customers, it could impact their ability to pay you. In this instance, Credit Insurance would ensure that your cash flow was uninterrupted.

If I incur a loss, how soon will a claim be paid ?

Generally, the claim will be paid within 90 days.

Are any services available on-line ?

Yes. With our on - line policy management system, you can make credit requests, file a claim, notify Euler Hermes Emporiki of payment extensions, and monitor your claims any time you want via the Internet.

Is it hard to apply for Credit Insurance ?

No. Simply complete an application and forward it along with your accounts receivables’ due dates to Euler Hermes Emporiki or insurance broker for a detailed quote.

A Credit Insurance policy gives you peace of mind and complete confidence to grow your business safely.