Receivable Insurance Tips
All of the major credit insurance underwriters experienced unprecedented levels of claims in 2008, and the forecast for 2009 indicates that the trend will continue or even worsen.
In these circumstances, it is critical to ensure that you understand your obligations under the policy and are complying with them.
- Customers will be experiencing tighter cash flows. If they do, they may request that you either extend the terms of payments or even agree to PAYMENT PLANS for existing receivables. Such arrangements must be approved by the underwriter on the policy. If you are approached for a payment plan, contact your insurance carrier before agreeing to it.
- Overdue accounts will increase during this period, it is critical that Overdue Reports are completed and filed according to the scheduled time as per your policy.
- Claims must be filed in a timely manner as set out in each underwriter’s policy. Understand the deadlines and ensure claims are filed as soon as possible.
- If premiums are being paid in installments or by declaration, make sure they are up to date.
- Do not release shipments to customers that are seriously overdue or who have amounts outstanding beyond the Maximum Extension Period in your policy.
- Regularly update the information in your customers’ credit files. Shorten your review cycles.
- Review the criteria for approving customers under the Discretionary Credit Limit in your policy.
Each underwriter has terms and conditions of coverage that vary from one policy to another. The foregoing points are general and apply to most policies. However, if you are unclear as to any conditions in your policy, you should contact your insurance carrier.
Millennium CreditRisk Management Limited is an independent Canadian owned insurance broker, specializing in only credit and political risk. It has been established since 1994 and represents over 160 companies from PEI to BC. Millennium's strength is a combined understanding of credit issues and unparalleled expertise in credit insurance - www.mcm.ca.