You can take your own measures to stay under the credit insurance cover:
- Increase your credit limit
Because of the delayed payment, the outstanding balance may increase. Ensure adequate coverage. Limits are valid retrospectively up to 30- 60 days prior to the limit decision (varies by insurer). Deliveries that took place during this period are therefore still insured (provided you meet the other policy conditions).
- You agree lower payment terms with your client
Of course, the question is whether this is smart and you are not bringing additional problems upon yourself. Do remember your limit and note that a self-assessment based on payment experiences built up on a shorter payment condition is not valid for a longer payment condition. There may be circumstances why you wish to do this, but in any case, be careful.
- Deferred payment
Within your policy terms, you may grant your own deferral of payment. On the due date of the invoice, the overdue period starts (usually 60 days). As long as no payment has been made, you should send your customer reminders, exhortations and notices of default during this period (good business practice).
- Official postponement of collection transfer
The policy has a deadline by which you must initiate collection on your buyer. You can apply to your credit insurer for an official moratorium. This will prevent you from failing to meet the debt collection assignment deadline. Be sure to suggest a reasonable period of 2-3 months to reach a solution. This will avoid collection costs.
What can't you do independently?
- Requesting an increase in the limit while the debtor is 60 days or more behind in payment
The credit insurer may interpret this as negative notices. Report this on your increase application for your limit.
- Self-assessment (this varies by insurer)
With some credit insurers, self-assessment expires if your buyer has not paid the invoices within 60 days of the due date. If you are in doubt about what is in your policy, contact Xolv.
- Forwarding during arrears
The policy has an automatic coverage stop after this period is exceeded. New deliveries are therefore no longer covered
- Forwarding on prepayment or cash basis
The credit insurer allocates all payments to the oldest outstanding invoice. By doing so, you help the insurer out of the risk, when this is not the intention.
The specialists at Xolv will be happy to look at it with you and advise you on what you can do to get the most out of credit insurance!
