Trade Credit Insurance: Single Debtor Buyer
Single-buyer trade credit insurance will cover one specific transaction or service to a particular customer. The policy will typically provide coverage for one year. There are three different categories of single-buyer trade credit insurance:
• Short-term. This will cover repayment terms of a duration of less than one year. This is typically used for the sale of non-capital goods.
• Medium-term. This will cover repayment terms of a duration of one to five years.
• Long-term. This will cover repayment terms of over five years. Coverage is typically limited to seven years.
The number of trade credit insurance companies who offer single-buyer trade credit insurance is limited and is usually available at a premium. Single buyer policies are considered to be high risk and the insurer expects a well-written and developed submission when applying. It is typically the responsibility of the insured to prove the customer’s financial capability, usually by providing financials and/or previous trade history for that customer.
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