Kreditförsäkring

Kreditförsäkring, often translated as credit insurance, is a financial product designed to protect businesses against the risk of non-payment by their customers. This non-payment can occur due to various reasons, including insolvency, bankruptcy, or protracted default by the buyer. The primary purpose of credit insurance is to safeguard a company's cash flow and profitability by mitigating the financial losses that could arise from unpaid invoices.

There are several types of credit insurance policies available, catering to different business needs. Trade credit insurance is the most common form, protecting domestic and international sales on credit terms. Export credit insurance specifically covers risks associated with selling goods and services to foreign buyers, who may pose a higher risk due to political instability or currency fluctuations in their home country. Some policies also offer protection against government actions, such as embargoes or expropriation, particularly in the context of international trade.

The benefits of credit insurance extend beyond just financial protection. It can enable businesses to offer more competitive credit terms to their customers, thereby increasing sales. Additionally, it can improve access to financing, as lenders may view companies with credit insurance as less risky borrowers. The process typically involves an application, assessment of the buyer's creditworthiness by the insurer, and the establishment of credit limits. When a covered loss occurs, the insurer reimburses the policyholder for a significant portion of the outstanding debt.