Trade Credit Insurance

Comprehensive 'Whole Turnover' Insurance

Key facts

Whole turnover cover is the mainstay offering from the insurance market.

Cover attaches to all sales made on credit terms in the policy period with insurer involvement on setting insured limits on larger customers.

Excesses are normally considered at low levels meaning a "ground up" approach is the norm and cash flow protection is the key when bad debts are incurred.

The ability of this product to be moulded to suit specific requirements and circumstances means that no two policies are the same.

This area of the market is occupied by the majority of insurers, all of whom have their own unique approach, capability and appetite for new business and trade sector risks.

Policy period

A minimum period of 12 months, but longer terms can be negotiated.

What's covered?

Insolvency and default cover attaching to insurable sales (link to below) in the policy period.

Insurable sales?

All sales less VAT, sales to local authority, nationalised undertakings, associated or group companies. By negotiation, sales to undoubted risks can often be excluded from cover to reduce insurable turnover and premiums, provided insurers are left with a fair balance of risk.

Discretionary credit limit

  • the majority of customers have their insurance limits set in house by the policyholder using a mix of credit report data or past payment history. Most insurers offer insured "opinions" as an option for use under the discretionary limit to replace, or supplement credit reports or trading experience.

Insurer credit limits

  • Insurers will agree insured credit limits for values in excess of the discretionary limit
  • will give their reasons when cover cannot be agreed in full.
  • limits may be reduced, or cancelled, by insurers during the policy year but background to these extreme decisions will be provided at the time
  • the effect on the policyholder is on future business only.

Insurers do not remove, or reduce, cover lightly and their input in this area is often based on confidential information that wouldn't be available to the policyholder. A notice period relating to forthcoming reductions or cancellations may apply.


Insurance will always exclude small attritional bad debts that won't harm the insured business. However, the excess is a negotiable area and insurers will offer premium savings and, possibly higher indemnities up to 100%, for a higher voluntary excess, or even an annual deductible.

Insured percentage

90% as a minimum but 95%, or even 100%, can be agreed as part of a negotiated package.


Often a fixed sum linked to

  • the level of insurable sales
  • bad debt history over the previous 2-3 years
  • key customer ratings
  • the trade sector being supplied
  • Payable by instalments, at no extra charge.

Policyholder obligations

Generally the requirement to notify certain events, such as serious customer late payment at pre determined milestones. Insurance requirements are simple, not intended to be onerous, and are usually already built in to a functioning credit control function.

Trade credit insurance overview