Insured or uninsured: 8 things you need to know about coronavirus and credit insurance

Published on 23/03/2020

The coronavirus holds us all in its grip. How the virus develops in the coming period, we cannot predict. But that the pandemic will have a huge impact on the global economy is clear. That means you need to keep a sharp eye on (the terms of) your credit insurance - with our help. In this blog, we list eight things you need to know and what we can do for you. This also applies to uninsured companies. Credit insurers may still have options now, so it is not too late to act.

1. Be alert to cover buyers and their outstanding receivables

On many companies, the measures around the coronavirus are having a huge impact. They are losing sales, unable to reach customers or poorly, and some businesses are even closed down completely. Orders are delayed or cancelled and payments are not received. Credit insurers are busy managing the expected problems. For now, it is very important that you yourself are alert to the coverage on your buyers and, in particular, the outstanding receivables on your buyers.

2. Orders postponed or cancelled? Get in touch!

If your buyer delays or cancels a placed order, please contact us. We will then determine what action to take in consultation with the credit insurer. It is essential to do so. The necessary action may vary from case to case.

3. Limit retraction/divergence: how do credit insurers deal with it?

At Xolv, we are convinced that credit insurers have learnt from the 2008-2009 financial and economic crisis. They are therefore unlikely to withdraw limits on buyers en masse. Depending on industry and country, credit insurers will do take action on financially weaker companies with poor ratings and/or companies that have not yet filed their 2018 annual figures.

4. What to do in case of limit reductions and/or withdrawals by your buyer?

Are you facing limit reductions and/or withdrawals from customers you do business with? If so, please forward them by e-mail to Xolv (preferably a copy of the reduction/withdrawal). We will discuss the situation with the insurers and see what we can do for you.

5. Payment deferral requests: how do you handle them?

We note that there are already many requests for deferred payments. You can accept deferral of payment within your arrears period, but we advise you not to confirm this in writing. In some countries, this can lead to the recovery of turnover by the receiver in the event of any subsequent bankruptcy.

Payment proposals that are a arrears period or collection period in your policy must always be approved by the credit insurer. If you receive this kind of request, please contact Xolv immediately. If you are insured with Coface or Atradius, you should have received specific information from these companies. If not, please let us know. Then we will still inform you.

6. Overdue period reached? Stop delivering!

Upon reaching the overdue period, you must stop delivering. Do you deliver anyway? Then new deliveries are no longer insured. If you deliver after the collection deadline and do not report the outstanding claims, you will lose cover on the entire claim. If you still need/want to deliver, please contact Xolv and we will submit this to the credit insurer. Please note, however, that credit insurers will avoid onward delivery in case of arrears as much as possible in order to limit risks.

7. What to do in case of desired postponement of 'report and transfer collections' deadline?

Upon reaching the collection deadline, as stated in your policy, you must report/transfer a claim for collection in the insurers' system. In doing so, keep in mind the deferral measures that some credit insurers have already offered. If you wish to postpone the deadline (whether or not requested by your customer), this should be explicitly requested per customer. If this needs to be done for a group of customers (e.g. all customers from Italy), the credit insurer considers this on a case-by-case basis. Again, it is essential to discuss this with us.

8. Keep paying your premium!

We have learned that some companies have stopped their premium payments. We would like to expressly point out that in case of non-payment of the premium, insurers will not make any claim payments! So we would strongly advise you to keep paying your premium. If you really cannot, please contact us. We will then see what we can do for you.

Reach Xolv

As you have read above, we urge our existing relationships to discuss any exceptions to the policy conditions with us, as these all have to be submitted to the credit insurer for approval. We therefore do everything we can to provide you with the best possible support. You make good use of that, because our phones are red hot and mailboxes are flooding. We only like that, because we would rather have you call ten times too many than once too few. We ask for your understanding when it takes a bit longer to get in touch or an answer.

Uninsured companies

Companies that do not already have credit insurance would be wise to get insured now. Credit insurers may still have options now, but this could soon change if the effects of the corona virus increase in severity. Many uninsured companies have already reported to us in recent weeks. Of course, we are ready to help these companies as well. Especially in these challenging times, with our expertise and years of experience, we can make the difference for companies, insured or uninsured.

Xolv can be reached by phone: 073-8200-295 and by mail: info@xolv.nl

Want to know more? Get in touch.