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How Does Accounts Receivable Insurance Coverage Work?

How Does Accounts Receivable Insurance Coverage Work?

How Does Accounts Receivable Insurance Coverage Work?

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How does accounts receivable insurance coverage work is a common question asked by business owners of all sizes, geographies and industries.  Effectively it’s insurance against bad debt and is coverage against one of your most valuable assets…your receivables.

What Does Does Accounts Receivable Insurance Coverage Cover?

Accounts receivable insurance coverage covers your losses due to a wide range of commercial and political risks and that could result in bad debt.  It can mean the difference between profit and loss or even bankruptcy for your business.

Accounts Receivable Insurance covers your business for a wide range of risks including:

  • Non-payment or bankruptcy of one of your clients
  • Payment delays due to blocked funds or problems with the transfer
  • Events and/or hostilities in a customer’s country that make payment difficult
  • Issues with currency conversion or transfer
  • Depending on the scope of coverage it can also include contract cancellation your customer’s refusal to accept the goods and cancellation of export or import permits.

Real Canadian Accounts Receivable Insurance Coverage Claims Example

A real Canadian claims example is as follows:  A Canadian business was expecting to make a $50,000 profit on roughly $1 million of annual sales.  However, one larger customer owing $60,000 didn’t pay due to bankruptcy wiping out the profitability of the business.   Thankfully the business had purchased accounts receivable insurance coverage through an insurance broker, like ALIGNED Insurance from one of Canada’s leading insurers called EDC and they received $60,000 and remained profitable.

To talk learn more about accounts receivable insurance coverage or for a quote call an ALIGNED Insurance broker today at  1-866-287-0448 

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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