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Protect Your Business with Trade Credit Insurance

8 July 2025

In the current economic climate, extending credit to customers has become an essential part of doing business—but it also introduces financial risk. Trade Credit Insurance is a risk management tool that helps protect your business from the impact bad debts when selling on credit terms. It covers risks such as Insolvency, Protracted Default, and Political Risk (for export contracts).

On 1st January 2025, Griffiths & Armour joined the Aon family, providing G&A clients access to Aon colleagues who have extensive expertise in placing advising on Trade Credit insurance programmes.

 

Why consider Trade Credit Insurance?

Many of our clients consider Trade Credit insurance when facing one or more of the following concerns:

  • A strategic push to grow sales, whilst maintain sound credit discipline
  • A recent experience with a bad debt that highlighted underlying vulnerabilities
  • Facing risk concentration with a few large customers
  • Challenges in resourcing effective credit monitoring across a growing customer base
  • Seeking finance for debtor assets
  • The need for early warnings of customer financial issues
  • Access to credit information on both existing and prospective customers

Additional cover options

  • Binding contracts cover
  • Collection action for overdue debts
  • Coverage for consignment stock and self-billing terms
  • Pre-Credit or Work in Progress cover
  • Specialist wording for construction contracts

 

Summary

If your business is approving unsecured credit terms, you’re essentially acting as a bank, offering an unsecured short-term loan to your customers. Without security, a customer’s failure to pay can result in a bad debt, leading to numerous challenges within your business. With Trade Credit insurance, your commercial decisions are validated and supported by the insurance company, ultimately protecting your balance sheet.

If you would like to explore how Trade Credit Insurance could support your business objectives, our team at Griffiths & Armour would be pleased to arrange a conversation with our Aon colleagues who specialise in this area.

 

Author

Jack Wolstencroft

Executive Director, General Insurance Division

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