Parameters that can be included in your credit insurance policy:
- Annual aggregate deductible:
Your company absorbs the first level of loss up to the deductible, then the insurance is initiated. The deductible usually covers the expected level of loss based on past history.
- Per buyer deductible:
Again this requires you to absorb the first loss for each buyer until the insurer comes into play.
- Co-insurance %:
You share the percentage of the insurance claim after deductibles are reached. The percentage rate is pre-set.
- Non qualifying loss:
Fixed amount of small losses which are not covered by the insurance policy. Once this amount is exceeded, policy comes into practice.
- Discretionary credit limit:
You have the autonomy to grant a credit limit to your customers up to the level stipulated in the contract. Above this, you should request a credit limit from the insurance company.
Depending on the type of policies the premium can be based on either the annual insurable turnover and paid on a monthly/quarterly/annual basis, or on the level of risks defined by the above parameters and paid annually.