Insurers make it a condition that the supplier must be creditworthy, through a credit limit decision approving this cover. The value of the prepayment must be declared under the policy. Many times, the same premium rate applies.
Credit risk coverage
Credit risk cover begins when you make an advance payment to the supplier and ends when the goods or services are delivered to you or when the advance payment is repaid to you. A maximum period is set between the date of the prepayment 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 will be happy to inform you further about this additional insurance that gives you extra security in doing business.
