Are your advance payments insured on your credit insurance policy?

Published on 11/12/2015

Your supplier may require an advance payment because they have to incur costs for goods or services that will be delivered to you. This may involve significant amounts and this entails the risk that you will lose your advance payment as a result of a bankruptcy, suspension of payments or debt restructuring of your supplier. If you have credit insurance, you can insure these advance payments on your policy.

Insurers impose a condition that the supplier must be creditworthy, through a credit limit decision approving this coverage. The value of the prepayment must be declared under the policy. The same premium rate often applies.

Credit risk coverage

Credit risk cover begins once you make an advance payment to the supplier and ends once the goods or services have been delivered to you or once the advance payment has been refunded to you. A maximum period is set between the date of the advance payment and the contractually agreed delivery date of the goods or services. Often no longer than 6 months.

What to do in case of insolvency?

In the event that your supplier becomes insolvent and cannot meet its obligations, a payment will be made by the insurer on the net invoice amounts paid in advance and received by your supplier up to the amount of the credit limit.

The Xolv team is happy to inform you more about this additional insurance that gives you extra security in doing business.

Knowing more? Please contact us.