Trade Credit Insurance

Protect your business from bad debt,
insolvency and unpaid invoices.

Trade Credit Insurance safeguards your business against the risk of customers failing to pay for goods or services sold on credit. Whether due to insolvency, protracted default, or political events, this cover ensures your cash flow is protected—helping you trade with confidence in the UK and Internationally.

Get in touch

What Is Trade Credit Insurance?

Trade Credit Insurance (aka TCI, Credit Insurance, Bad Debt Insurance, Trade Debtor Insurance, Invoice Insurance, Invoice Protection) is a vital risk management tool for businesses of all sizes, especially SMEs. It covers losses from non-payment of trade debts, allowing you to offer credit terms to customers without putting your business at risk. Credit Insurance is more than just a policy— it’s a complete credit management solution, including:

Customer risk prevention: Ongoing monitoring and assessment of your customers’ financial health.
Debt recovery support: Professional collection services for unpaid invoices.
Compensation for bad debts: Prompt payment for covered losses after a set waiting period.

Why SMEs Need Credit Insurance & Bad Debt Protection

For many SMEs, trade credit is a major source of working capital—second only to bank lending. But extending credit comes with risk. Even one unpaid invoice can cause serious cash flow problems or worse. Credit Insurance helps you:

Trade confidently with new and existing customers
Expand into new markets or sectors
Protect your business from unexpected shocks
Strengthen your credit control processes

Why Trade Credit Cover Is Essential for UK Businesses

Rising Insolvencies: UK business insolvencies have surpassed pre-pandemic levels, with over 20,000 cases forecasted annually. Even previously prompt-paying customers can suddenly default, putting your cash flow at risk.
Bad Debt is a Major Threat: 22% of company failures are due to bad debt, and 76% of creditors in liquidations never recover what they’re owed.
Accounts Receivable – Your Most Exposed Asset: Many businesses insure property and equipment, but leave their receivables—the asset most likely to suffer loss—unprotected.

Benefits of Trade Credit Insurance & Business Cash Flow Protection

Trade Credit Insurance protects your business from late or unpaid invoices, ensuring your cash flow stays secure. It also enhances your credibility with banks, lenders and invoice finance providers, helping you secure stronger lending terms and greater access to working capital.

Cash Flow Protection

Bad debt protection ensures your cash flow stays stable even when customers fail to pay on time or become insolvent. With cover in place, your business avoids the financial strain caused by unpaid invoices and maintains healthier day-to-day liquidity.

Support for Business Growth

Credit Insurance gives you the confidence to take on larger orders, extend terms to new customers, and explore new markets — including exports — without increasing your exposure to credit risk. It enables safer, more predictable business growth.

Better Access to Bank Lending

Insured receivables strengthen your balance sheet, helping you secure improved lending terms from banks and funders. Lenders see protected invoices as lower risk, which can lead to increased borrowing capacity, better interest rates, and faster approvals.

Stronger Invoice Finance & Trade Finance Terms

Invoice insurance supports more favourable trade finance arrangements. Factoring and invoice discounting providers often offer higher advance rates and easier access to working capital when your sales ledger is insured, improving overall cash flow.

Expert Credit Insight & Risk Management

Access valuable credit risk management insights, including continuous monitoring of your customers’ financial stability. This helps you set appropriate limits, identify potential risks early, and make informed decisions about who you trade with.

Professional Debt Recovery Support

Take advantage of specialist debt recovery services when customers pay late or refuse to pay. These professional teams work to recover overdue invoices efficiently and compliantly, helping protect your cash flow and reducing internal workload.

Stronger Relationships with Suppliers & Lenders

Having Credit Insurance in place demonstrates strong financial discipline. It reassures suppliers, funders, and investors that your debtor book is protected, supporting better terms, improved trust, and enhanced commercial relationships.

Enhanced Internal Credit Management

Using TCI encourages more structured credit control procedures within your business. From credit checking to ongoing monitoring, it supports better oversight of your debtor book and reduces the likelihood of unexpected losses.

Peace of Mind & Business Continuity

Whether you’re trading domestically or through Export Credit Insurance, having cover provides peace of mind. If a customer becomes insolvent or defaults, your policy helps ensure financial continuity — protecting both profitability and future growth.

Export Credit Insurance for International Trade

Trade Credit Insurance isn’t just for domestic sales—it’s your passport to safe, sustainable international growth.

Expanding into overseas markets offers huge opportunities—but also exposes your business to new risks. Trade Credit Insurance is a vital tool for UK exporters, providing protection and confidence when trading globally.

Protection Against Political and Economic Risks

Export Credit Insurance protects you against non-payment caused by political events such as war, civil unrest, or government action — as well as economic issues like currency restrictions or sudden market instability in your customer’s country.

Confidence to Enter New Markets

Insurers monitor over 85 million companies worldwide, providing real-time insights and risk assessments. This allows you to safely extend credit to new international customers and markets.

Faster, More Secure Export Growth

By offering competitive credit terms backed by insurance, you can win more international contracts and grow export sales without exposing your business to unacceptable levels of risk.

Improved Access to Export Finance

Banks and trade financiers are more likely to offer funding or better terms when your international receivables are insured, supporting your working capital and growth plans.

Global Debt Collection Support

If a foreign customer fails to pay, your insurer’s global network of debt collection specialists can pursue recovery in the local language and legal system, increasing your chances of success.

Stability in Volatile Global Conditions

Export markets can be unpredictable. From geopolitical events to supply chain disruption, Export Credit Insurance provides stability and peace of mind, ensuring your international business remains protected even as global conditions change.

Why Credit Insurers Provide Superior, Real-Time Credit Risk Information

Most businesses rely on credit reports from platforms like Companies House or CreditSafe, but those sources often use historic data based on filed accounts. Credit insurers, however, use real-time global information, daily payment behaviour, and proprietary databases—offering far more current and accurate insight into your customers’ financial health.

Real-Time Risk Monitoring

Credit insurers update risk profiles daily using global data on more than 85 million companies. This provides a far more accurate view of customer solvency and payment behaviour than traditional, static credit reports.

Early Warning of Financial Trouble

Because insurers track real-time payment patterns and financial distress indicators, they can identify deteriorating conditions long before these appear in public filings or credit reports that may be 12–18 months out of date.

Better Decision-Making

With up-to-date credit intelligence, you can set safer credit limits, avoid high-risk customers, and trade confidently both in the UK and internationally—reducing your exposure to bad debt.

Reduced Dependency on Outdated Reports

Relying solely on Companies House data or standard credit reports can leave your business exposed. Real-time insight from credit insurers gives you a stronger foundation for protecting your cash flow and managing risk.

The Case for Balance Sheet Protection

Many companies insure their physical assets—property, vehicles, equipment—but overlook one of their most vulnerable assets: trade debtors. Since receivables are often the largest figure on the balance sheet and the most at risk from customer insolvency, protecting them is essential for long-term financial security.

Why Many Businesses Don’t Insure Their Debtors

Some firms are unaware that Credit Insurance exists, while others assume it’s expensive or rely too heavily on internal credit control. Many businesses also place too much trust in long-standing customers—even though 50% of insolvencies involve previously prompt-paying companies.

Misunderstanding the Real Cost of Bad Debt

The cost of a single unpaid invoice can far exceed the annual premium of credit insurance. Many businesses underestimate the financial impact of just one default and overestimate their ability to predict risk.

Trade Debtors Are Your Most Exposed Asset

Receivables often represent the largest and most vulnerable part of a company’s balance sheet. Yet unlike physical assets, they are not guaranteed to hold value—making them far more likely to suffer loss.

Why Balance Sheet Protection Matters

Bad debt contributes to 22% of company failures, and 76% of creditors in liquidation recover nothing. Insuring your debtors protects cash flow, strengthens financial stability, and supports growth—especially when trading conditions become challenging.

Protecting Against the Unexpected

Even strong customers can fail without warning. Credit Insurance protects your business from sudden shocks, giving you peace of mind and safeguarding financial health in uncertain times.

How Trade Credit Insurance Works

Trade Credit Insurance is designed to protect your business from the financial impact of late payment or customer insolvency. Although every policy is tailored, the process generally follows a clear set of steps—from setting up cover to receiving compensation in the event of non-payment.

Step 1 – Setting Up Your Policy

You choose which customers or invoices you want to insure — whether that’s your full sales ledger or just key accounts. The insurer then assesses the creditworthiness of those customers using global data and real-time risk analysis. Based on this, they assign credit limits showing the maximum amount they will cover if a customer fails to pay.

Step 2 – Trading with Confidence

You continue trading as normal, offering credit terms to your customers. Behind the scenes, the insurer monitors their financial health and alerts you to any deterioration in risk, helping you make safer trading decisions.

Step 3 – If a Customer Fails to Pay

If an invoice becomes overdue beyond agreed terms (often up to 120 days), or if the customer becomes insolvent, you notify the insurer. They may initiate debt collection using their specialist global recovery network.

Step 4 – Claims & Compensation

If the debt cannot be recovered, you submit a claim. Insolvency claims are typically settled within around 30 days of administrator confirmation. Depending on your policy, you can usually recover up to 90% of the outstanding invoice value — protecting your cash flow and limiting financial loss.

Step 5 – Ongoing Support

The insurer continually monitors your customer portfolio, updating you with new credit limits, risk signals, and recommendations. As your business grows or your customer base changes, your cover can be adjusted accordingly to keep you protected.

Key Features of a Credit Insurance Policy

Trade Credit Insurance policies can be tailored to suit different industries and trading patterns. While cover varies between insurers, most policies offer the following core features:

Up to 90% protection for unpaid invoices due to insolvency or protracted default.
Fast claims settlement, with insolvency claims often paid within around 30 days of administrator confirmation.
Flexible cover for both UK and export sales, with options designed around your sector and customers.
Specialist extensions such as pre-dispatch, work-in-progress and advance payment protection for manufacturers and project-based businesses.

Who Should Consider Trade Credit Insurance?

Credit Insurance is suitable for a wide range of businesses, particularly those that extend credit terms to customers. It may be a strong fit if your business:

Trades on open credit terms
Has a turnover of at least £500,000
Is growing quickly or entering new markets
Has experienced late payments or bad debt previously
Needs support assessing customer creditworthiness before offering terms

Why Choose Rowlands & Hames as Your Credit Insurance Broker?

Access to leading insurers
We work with the UK’s top credit insurance providers, so you benefit from competitive terms, wide policy options and cover tailored to your sector and trading profile.

Personal advice & ongoing support
From your first enquiry through to renewals and claims, our experienced team provides practical, hands-on guidance to help you manage credit risk and protect your cash flow.

World-class data & risk analysis
Through our insurer partners you gain access to real-time credit information and risk assessments, using global databases that monitor over 85 million companies worldwide. That means more informed decisions and fewer surprises.

Solutions designed for SMEs
We understand the pressures on small and medium-sized businesses. Our recommendations focus on flexible, scalable cover that fits your turnover, customer base and growth plans.

Help when you need to claim

If a customer fails to pay, we’re on hand to support you through the claims process and to access the insurer’s specialist debt recovery services, helping you get paid and keep trading with confidence.

Choose Rowlands & Hames for expert, independent advice and comprehensive Credit Insurance solutions that help your business thrive – in the UK and internationally.

Get a Trade Credit Insurance Quotation

Don’t let bad debt threaten your business.

Please complete one of the forms below and email it to credit@rowlands-hames.co.uk
, ideally with a copy of your most recent aged debt report:

Policy limits and exclusions may apply, please see policy wording for full terms and conditions.

Trade Credit Insurance FAQs

Is Trade Credit Insurance expensive?

Premiums are often a fraction of the potential loss from a single bad debt. Many SMEs find the cost can be built into client quotes, and flexible payment options are available. Premiums and limit fees typically start from £4,500 but there are exceptions.

Can I cover smaller or non-registered customers?

Yes, policies can be tailored to include smaller accounts and non-limited businesses, giving you broad protection.

Doesn’t good credit control make insurance unnecessary?

Strong credit control is vital, but even the best processes can’t predict sudden insolvency or external shocks. CREDIT INSURANCE works alongside your credit control to provide an extra layer of security. It is by using the insurers up to date knowledge of ‘buyers’ that decisions are made on the latest information.

What does Trade Credit Insurance cover?

Trade Credit Insurance covers losses when customers fail to pay for goods or services due to insolvency, protracted default, political risks, or other approved credit events. It protects your accounts receivable and ensures your cash flow stays stable even when customers cannot pay.

Who needs Trade Credit Insurance?

Any business that sells goods or services on credit terms can benefit. This includes SMEs, manufacturers, wholesalers, exporters, and companies heavily reliant on a small number of key customers. If unpaid invoices would harm your cash flow, credit insurance is essential.

How do insurers decide credit limits for my customers?

Insurers assess financial information, trading behaviour, industry sector, and payment performance to set an approved credit limit for each of your customers (“buyers”). These limits can be increased or reviewed throughout the policy period.

Does Trade Credit Insurance help with overseas customers?

Yes. Many policies include political risk cover, protecting you from non-payment caused by war, currency issues, government intervention, or export/import restrictions when trading internationally.

Will having Trade Credit Insurance help me access finance?

Yes. Banks and lenders often view insured receivables as stronger collateral, which can improve your access to funding or reduce borrowing costs. It can also increase your credit line with existing lenders.

Can I insure only my largest customers?

You can choose to cover your entire sales ledger or only selected high-value customers. However, insurers generally prefer a balanced portfolio and may not insure only your highest-risk customers.

What is protracted default?

Protracted default is when a customer does not pay within the agreed credit period, despite no signs of insolvency. If they simply fail to pay or ignore requests, the insurer will step in after the waiting period and settle the debt.

How long does a Trade Credit Insurance policy last?

Most policies run for 12 months, although arrangements can sometimes be tailored for project-specific or short-term contracts.

How are claims handled?

If a customer becomes insolvent or fails to pay within the insured timeframe, you notify your insurer. After the investigation and waiting period, the insurer pays the covered amount (typically 80–95% of the invoice value, depending on policy terms).

How much does Trade Credit Insurance cost?

Premiums vary depending on turnover, industry, customer risk profile, credit management practices and loss history. Many insurers offer monthly instalments, often interest-free.

Contact the Team

Mike Watkinson Dip CII

Insurance Sectors We Cover

We provide tailored insurance solutions across a wide range of sectors. Each policy is designed around your industry’s specific risks, ensuring you’re fully protected, compliant, and supported by our expert team.