What is Receivables Insurance?
Receivables Insurance insures suppliers against the risk of non-payment of goods or services by their domestic or international buyers. It’s a valuable tool for business, brokers and bankers.
What kind of risks can be insured?
Receivables Insurance insures against the risk that a buyer does not pay. It can also cover the risk that a buyer pays very late. A buyer will not pay after he has been declared bankrupt, insolvent, or a similar legal status. Similarly buyers sometimes opt for a bankruptcy protection arrangement, which allows them to delay payments for an extended period. Both instances are covered under a Receivables Insurance policy. Receivables Insurance policies can include a wider range of cover, depending on the circumstances. Some policies consider a delay in payment to also be an insolvency (so-called protracted default cover). If a buyer does not pay, the Receivables Insurance policy will pay out a percentage of the outstanding debt. This percentage usually ranges from 75% to 95% of the invoice amount, but may be higher or lower depending on the type of cover that was purchased.
Receivables Insurance policies are flexible and allow the policyholder to cover the entire portfolio or just the key accounts against corporate insolvency, bankruptcy and bad debts. The most common type of cover is so-called Whole Turnover Cover, which covers all buyers of the policyholder.
Understanding Receivables Insurance
RIAC’s Receivables Insurance Brokers and Providers are on the frontline of risk mitigation for businesses in Canada. Our members help Canadian companies grow and succeed by providing them with tools to trade securely at home and abroad.
The Impact of a Bad Debt Loss
CFO’s Best Friend
A Business Multi-Tool
for Domestic Sales
for Export Sales
Choosing a Policy
Your Business & COVID-19
May 7, 2020
Trade Partnership Insurance Launched to Bolster Canadian Business Through COVID-19 Impact
Ottawa, ON – May 7, 2020 – The Receivables Insurance Association of Canada (RIAC) is pleased to announce that RIAC members Export Development Canada (EDC), Euler Hermes, Atradius, Coface Canada and The Guarantee Company of North America have collaborated to bring much needed credit capacity to support Canadian businesses impacted by the COVID-19 pandemic.
Trade Partnership Insurance (TPI) is a select buyer reinsurance product that is intended to provide the Canadian-based private credit insurers with additional credit capacity.