Every business has its unique features. Coface designs each trade credit insurance contract taking into account every client’s specificity.
Lifecycle of any insurance contract has several phases.
Phase 1 – Actions to be Taken Prior to Signing a Trade Credit Insurance Contract
Based on Application for Trade Credit Insurance filled out by a supplier Coface checks credit worthiness of the buyers, sets credit limits per buyer and makes an assessment of credit risks for the entire portfolio. Then, Coface makes a decision on what insurance cover can or cannot be extended and sends quotation to the applicant.
Phase 2 – Signing of the Insurance Contract
The insurer and the insured party negotiate insurance cover and the insurance contract wording. Successful negotiations result in a mutually beneficial contract to be signed and stay valid for 1 year.
Phase 3 – Insurance Contract Administration
As long as the insurance contract is valid, the insured party shall have the right:
To apply new buyers to be covered by the insurance contract To request alteration of credit limits per buyer To cease insurance cover per buyer in case of trade termination with the seller
As long as the insurance contract is valid, the insurer shall have the right:
To control and monitor the credit portfolio of the insured party To suspend any granted credit limit in case of risk increase To suspend a credit limit in case of an overdue on the buyer concerned. The suspension will apply to all posterior shipmentss made to the particular buyer until the overdue debt is repaid.
As long as the insurance cover is valid, the insured shall provide the insurer with information on all the supplies made to the buyer and the receivables due as often as agreed by the parties. Besides, the insured shall inform the insurer of any changes that may result in a higher risk or a bigger loss.
In case the buyer fails to repay the debt, the insurer shall pay the insured an insurance indemnity in time specified by the insurance contract, provided that:
Validity of receivables has not been disputed by the buyer, The insured has sent the insurer an overdue notice, a request for debt collection by the insurer, and a claim for indemnity payment (with detailed description of the losses enclosed) in time specified in the insurance contract, The insurance indemnity meets the conditions specified in the insurance contract with respect to the credit limit per buyer, the limit of the insurer’s liability, and other terms and conditions.
