If you are a construction company that finds yourself navigating unfamiliar territory in the world of trade credit insurance, you’re certainly not alone. As a seasoned authority in the market, both in the UK and across the globe, FinCred will be your trusted partner for construction. We help shield you from the perils of unpaid invoices and other credit risks, and will help you build a resilient foundation for success.
Construction: A Risky Business
Bad debt puts construction companies at risk of insolvency. Construction News recently reported that 363 construction companies went into insolvency in the last year, a 42% increase on 2022.
The pandemic has placed construction companies in a precarious position. It is prudent to take certain precautions to protect the future growth of your business. One recommendation is to require a performance bond from your subcontractors. Another crucial step is to purchase trade credit insurance.
How Credit Insurance Benefits Construction Companies
Does your construction company benefit from offering your goods or services on credit terms?
Credit terms can help facilitate trade, but they can come with a risk. If a client becomes insolvent, invoices will go unpaid. This interruption to your cash flow could disrupt your business’ growth, or worse, place your trading future in jeopardy.
Trade credit insurance, also known as bad debt protection, gives you peace of mind against non-payment due to client insolvency. You will have vital reassurance that even if your customers fail to pay their debts, your business will be indemnified. That means you can trade on credit terms, and continue to grow your business efficiently.
Working With A Trade Credit Insurance Company
The trade credit insurance market is varied and complex. There are specialised policies that focus on exports, those that focus on political risks, and many others.
FinCred is a broker that maximises its expertise, specialised tools, and relationships across the market to secure suitable policies with insurance companies for our clients.
We specialise in crafting bespoke trade credit insurance solutions expressly designed to align with the requirements of the construction industry. Whether you’re a small builders firm or a multinational construction corporation, we will provide the security you need to trade confidently on credit terms.
We discuss your business’s unique needs, assess the areas of concern, and propose the best solutions to minimise the risks to your accounts receivable.
Types Of Trade Credit Insurance
Construction companies most commonly need one of the following types of trade credit insurance:
Single Debtor Insurance
Also known as single buyer, single risk or single customer insurance. This policy covers your business against bad debts from one single debtor up to a specified credit limit.
The insurance can be comprehensive, covering insolvency and protracted default or insolvency only. Underwriting criteria are more restrictive than whole turnover insurance policies.
Whole Turnover Insurance
Comprehensive trade credit insurance cover for a business’ entire ledger. The insurance covers buyer insolvency and protracted default/non-payment for domestic and export buyers. Policy structures are usually “ground up” with a relatively small excess. Commercial indemnity is usually up to 90% of the credit limit.
Benefits of Credit Insurance for Construction Companies
- Improves Cash Flow – Protect your business against fluctuations in cash flow caused by bad debts and unpaid invoices.
- Facilitates Growth – Trade confidently with new customers and increase trade with existing customers.
- Enhances Profitability – Increase exposure to customers safe in the knowledge that this risk is protected.
- Delivers Vital Insight – Avoid bad debts with in-depth information on your customers and markets to support your credit management and enable the business to make informed decisions.
- Creates a Competitive Advantage – Trade at higher volumes on open credit terms compared to your competitors.
- Provides Funding – Access finance and funding opportunities.
Find out more by reading our blog: How Trade Credit Insurance Can Boost Your Business Profits and Growth.
Work With FinCred, A Leading Trade Credit Insurance Company
As a highly experienced UK credit insurance broker, FinCred is uniquely equipped to help you navigate the complex markets of trade credit insurance.
As an independent company, we can act with your best interests at heart. That’s why we think of ourselves as insurance partners to our clients. From first contact to after the policy is in place, we are in your corner, arranging the best trade credit insurance solution possible for you.
Your business is unique, and so is our bespoke service. We find trade credit insurance policies that satisfy your particular needs.
Contact us today for your trade credit insurance quote.