Credit Insurance

Credit insurance transfers the commercial risk of non-payment to the insurer in exchange for payment of the insurance premium.

In case of non-payment, the insurer INDEMNIFIES, but after indemnification, it continues to take steps to COLLECT the unpaid debt.

In addition, with the payment of the classification cost, the insurer monitors the financial situation of each debtor, alerting the insured of any incident, thus performing a function of PREVISION of possible losses.

It is therefore a policy that performs 3 functions: PREVIEW+ INDEMNIFICATION+RECOVERY.

Coverage

The coverages offered by Credit Insurance are as follows:

  • Insufficiency of assets: The impossibility of executing the final judicial sentence or final arbitration award recognizing the Insured's credit right due to the non-existence or insufficiency of free assets of the debtor and, if applicable, of the guarantor to satisfy, totally or partially, the payment of the debt.
  • Uncollectible credit: The agreement between the Insured and the Company whereby the credit is deemed uncollectible.
  • Insolvency proceedings: The declaration of the debtor client, by means of a final court order, in a situation of insolvency proceedings.
  • Waiver: The approval of a judicial settlement, or of an extrajudicial transaction previously authorized in writing by the Company, which implies a reduction or reduction of the amount of the insured credit.
  • Prolonged default: The total or partial non-payment of the credit after six months from the date of receipt by the Company of the Notice of Provisional Insolvency and of the original documentation evidencing the debt.
More information

To be taken into account

  • The contracting of credit insurance makes it possible to almost ELIMINATE THE PROVISION FOR INSOLVENCY PROVISIONS, and to allocate these resources to other matters, thus increasing the company's profitability.
  • When debtors perceive that their supplier's sales are insured, they tend to pay more promptly, as they are aware of the enforceability of the insurer.
  • If the insured makes a bank discount, the contracting of the insurance allows him to negotiate BETTER CREDIT CONDITIONS.

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