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Is there credit insurance that also covers preshipment risk?

News
02 October 2020

 

Suppose your company makes made-to-measure cupboards and receives a large order from a hotel chain. You enthusiastically set to work in order to be able to deliver the requested cabinets on time. You order and pay for the specific type of wood the customer wants and your employees start sawing. But then your customer goes bankrupt or breaks the agreement, even before you have delivered and before he has reimbursed you for the materials you ordered and the custom work. It is therefore questionable whether you can recover this damage from your credit insurance. After all, does credit insurance that also covers preshipment risk actually exist?

Would you prefer a personal interview?

Credit insurance offers limited cover

With credit insurance, you can rest assured that your product or service will always be paid for, even if your customer suddenly turns out to be insolvent. Mind you, you must have already delivered your product or service. If the latter condition is not met, your company falls prey to preshipment risk, which is not covered by credit insurance by default. Preshipment risk is the risk of non-payment that you run from the signing of the contract until just before delivery.

Credit insurance with preshipment risk

You read it correctly: a credit insurance with preshipment risk does exist. By extension, you will then be reimbursed for all costs incurred between the time of order confirmation and the actual delivery (read: the delivery period).  But, of course, insurers attach a lot of special conditions to it and the cover is not as extensive with every insurer. For example, you would certainly not be the first to exceed the delivery period, with all the consequences this entails. So be sure to talk about it with one of our insurance architects!

Contact an expert

ADD conducts an extensive market study for you and takes a close look at your specific (preshipment) risks. We listen to the various players and finally make you a no-obligation, personalised insurance proposal. With such a tailor-made insurance package, you will never again face unpleasant surprises. Don't hesitate to contact us soon!

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