Search
 

Export Trade Credit: A Buyer’s Market

Export trade credit insurance can be a companys smartest buya product that absorbs the cost of deadbeat debtors.

By Russ Banham | Updated on November 01, 2013

Export trade credit insurance can be a company’s smartest buy—a product that absorbs the cost of deadbeat debtors. The insurance covers credit risks caused by the default, bankruptcy or insolvency of a buyer’s customers, up to a stated financial limit. All well and good, except when the insurer midway through the policy period cancels the limits of financial protection.  

This was the unfortunate situation many policyholders fell into following the financial crisis that reared in 2008. Not that the insurers did anything wrong since the policy contract wording clearly stated that they could cancel the financial limits with a 24-hour notice. The reason for the cancellation is the insurer’s sense that a customer’s buyer is suddenly an excessively high credit exposure. The policyholder must now bear this risk on its own balance sheet.

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2025 ALM Global, LLC. All Rights Reserved.