Trade Credit Insurance
Trade Credit Insurance protects your business when a buyer fails to pay for goods or services supplied on credit, whether through insolvency or prolonged default. It covers a defined share of each unpaid invoice, so one large buyer default does not wipe out your working capital. Both domestic sales within India and export receivables can be covered, and export cover can extend to political risks in the buyer's country.
What it is
Trade credit insurance covers your accounts receivable, usually a business's largest unsecured asset. You continue selling on credit terms as normal, and if a buyer becomes insolvent or simply fails to pay within the period defined in the policy, the insurer indemnifies the covered percentage of the invoice value, with the balance retained by you so both sides share the risk. In India the product is offered by general insurers under IRDAI's trade credit insurance framework.
Policies are typically written on a whole-turnover basis covering your buyer portfolio, with the insurer setting a credit limit for each significant buyer based on its financial health. This turns the insurer into an early-warning system: limits are monitored and adjusted as buyer conditions change. Export policies can add political risk cover for events like currency transfer restrictions or import bans that prevent payment.
Who needs it
Trade credit insurance suits any business that sells on open credit terms: manufacturers supplying dealers and OEMs, wholesalers and distributors, service companies with large corporate receivables, and exporters shipping to buyers they cannot easily assess. It matters most where revenue concentrates in a few large buyers, since a single default can threaten the whole business. It also helps companies that want to win customers by offering longer credit terms safely, enter new markets or geographies with unfamiliar buyers, or improve financing, because banks generally view insured receivables more favourably when lending against them.
What's covered
- Non-payment due to buyer insolvency or bankruptcy
- Protracted default, where a solvent buyer fails to pay within the defined period
- Domestic credit sales to buyers within India
- Export receivables from overseas buyers
- Political risks on exports, such as currency transfer restrictions or import bans, where included
- The covered percentage of each insured invoice, as set out in the policy schedule
- Buyer credit assessment and ongoing portfolio monitoring by the insurer
Typically not covered
- Disputed invoices, where the buyer contests quality or contract terms, until the dispute is resolved
- Sales made beyond the credit limit approved for that buyer
- Interest, penalties and collection costs added on top of the invoice value
- Sales to associated or group companies, which are typically excluded
- Advance payment and cash-on-delivery transactions, where nothing is owed on credit
- Your retained share of each invoice, as defined in the policy
Why buy it through Assurmate
One default cannot sink the business
When a major buyer fails, the policy replaces most of the lost cash, protecting working capital, vendor payments and payroll from the shock.
Grow sales with confidence
You can extend credit terms to win customers and enter new markets or export destinations knowing the receivable is protected.
Buyer intelligence built in
The insurer assesses and monitors your buyers' financial health when setting credit limits, giving you early warning before trouble hits.
Better conversations with your bank
Insured receivables are stronger security, which can support higher or cheaper working capital finance against your debtor book.
Free comparison across 75+ insurance partners
As a trusted insurance advisory we compare trade credit terms across 75+ insurance partners, including cover percentages, buyer limits and claim conditions.
Support through the claims process
Credit claims involve waiting periods, buyer documentation and recovery steps. Our team keeps the process moving so settlement is not delayed.
Optional add-ons
- Political Risk Cover. Extends export cover to non-payment caused by events in the buyer's country, such as currency transfer restrictions, import bans or government action.
- Pre-shipment Cover. Covers costs already incurred on goods being manufactured for a buyer who becomes insolvent before shipment, offered by select insurers.
- Top-up Cover. Adds an extra layer of cover on specific buyers above the primary credit limit, useful when exposure to one large customer keeps growing.
How to buy through us
- 1
Share your receivables profile
Tell us your turnover, buyer concentration, credit terms, bad-debt history and whether you sell domestically, in exports or both.
- 2
Compare tailored quotes
We compare whole-turnover terms from 75+ insurance partners, including cover percentage, buyer credit limits, waiting periods and premium.
- 3
Set buyer limits with our help
We work with you and the insurer on credit limits for your key buyers, and explain exactly how and when the policy pays.
- 4
Get covered and stay supported
We complete the proposal and issue the policy, then support limit reviews, overdue reporting and claims through the year.
Trade Credit Insurance questions
The things people ask us most about this cover.
The policy pays the covered percentage set out in your schedule, with the balance retained by you so both sides share the risk. The exact percentage varies by insurer, buyer quality and policy structure, which is why comparing terms matters.
The insurer assesses each significant buyer's financial health, payment record and sector conditions, then approves a credit limit per buyer. Sales within the limit are insured; sales beyond it are at your own risk until the limit is raised.
Not while the dispute is open. If a buyer withholds payment citing quality or contractual issues, the policy responds only once the dispute is resolved in your favour, through agreement, arbitration or court. Clean documentation of orders and deliveries protects your claim.
ECGC is the state-owned export credit agency focused on supporting Indian exporters. Private trade credit insurers cover both domestic and export receivables, and terms, buyer limits and service differ between providers. Many businesses compare both routes before deciding.
It often helps. Banks lend against receivables more comfortably when those receivables are insured, because the default risk is substantially transferred. Some lenders factor this into margins or drawing power, though each bank applies its own policy.
Cover percentages, waiting periods, buyer limit service and claim conditions differ meaningfully between insurers. Our IRDAI-certified advisors compare plans across 75+ insurance partners, negotiate terms suited to your buyer book, and support you fully at claim time, for free.
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