Protection against bad debts
With the credit on the safe side
Annually advised companies in difficulty, because no large or too much late in paying. With a credit insurance to protect yourself against bad debts.
Anyone goods or services to its clients, in the familiar rule that his bills are paid on time. However, this is unfortunately not always the case.
Protection against bad debts
With a default insurance (credit insurance) can become manageable costs to the high risk of bad debt protection. However, the risk protection against bad debts is a market for specialists. Only a few companies provide any insurance claim in the German market:
Euler & Hermes
Atradius
Coface Germany
Zurich Financial Services
R + V Versicherung
What does a debt default insurance?
An insurance claim is made up of several modules that each policyholder as required can provide. So we decided as a customer, for example, whether you only domestic assets, foreign assets, or both wants to insure personal finance software. Depending on the provider can claim losses due to political risks and natural disaster coverage.
With the credit agency shall consider the creditworthiness of the insurer to insured customers and monitored the calls in advance. In arrears he handles the collection and payment order from.
If a claim is finally fails, the credit replaces the insurer thereby damage.
How high is the insurance?
The insurance company does when a customer finally can not pay. Depending on the specific arrangement is compensation for up to 100% of the claim amount monthly budget planner. However, the insurer requires that all facilities previously used to collect the claim. Only after an unsuccessful collection, there is money. Therefore, the insurance company has its own interest in the collection of outstanding receivables.
The insurer will normally
after an unsuccessful foreclosure against the defaulting customers,
if enforcement is demonstrably hopeless,
if the customer an insolvency or lack of mass is rejected,
if a court settlement proceedings against the customer will be opened or
if an out-rate compared with all creditors is reached.
What is the cost of a debt default insurance?
The premium for an insurance claim is based on the annual turnover and / or the receivables portfolio, the insurance should be monthly budget calculator. The insurer multiplying the basic premium with a loss factor for the individual risk. With a high deductible in the event of a loss can reduce the contribution.
For calculation of the premium the insurance company
the number and creditworthiness of customers
the agreed payment terms,
the countries where the customers are located,
the amount of bad debts in the past years and
the scope of the agreed insurance benefits.
Hermes guarantees
If you go to foreign supplies, we are often at a difficult economic and political environment. In many cases, but the federal export credit guarantees, the so-called “Hermes Guarantee.” Should the foreign customer does not bounce the German state.
The state loan guarantee to get but only if the risk is acceptable. It also has to be an “eligible business” act. Whether this is so, will the guarantee commitment examined. Unlike insurance claim can therefore only individual transactions.
The main advantage of a government loan guarantee is to see that even deliveries in insured states in which private insurers because of high credit risks aside.
Cost of a Hermes guarantee
As with private insurance claim, you pay for a Hermes guarantee, an insurance premium, registration and copy fees.
The exact costs depend on the risk of the importing country, the maturity and the creditworthiness of the debtor. If the damage to the policyholder accepts as an exporter, an excess 5-15%.
