Credit insurance overdue declaration
There are 2 types of outstanding payments for credit insurers:
If the purchaser manage to convince the credit insurer that there is a rightful dispute about your invoices you won’t be compensated any more.
In order to get your compensation, you must report your unpaid within the contractual period agreed with your insurer and have respected each clause in your contract that imply good management of your receivables. Otherwise, you will be considered "neglected creditor" and your insurer will refuse to compensate you.
Upon compensation paid by the insurer, he will turn against the debtor and will do the necessary steps in case of bankruptcy proceedings (statement of claim, negotiation with the administrator) and actions of collection in other cases. If he manages to get the full payment of the amount due, it is possible that he pay you back the full amount of your claim.
When reporting the unpaid to the credit insurer you grant a mandate for the actions he will initiate for you to recover your bills.
The credit insurer becomes the creditor and considers your own client as his debtor. He will cancel the guarantees given to other suppliers of your client who may in their turn cancel credit lines previously established in its favor.
Before sending the record to the credit insurer you can warn your client about the risks he faces. He may change his mind and pay your bills.
The use of credit insurance requires a good receivables management and debt collection. If this is not the case, you will have both insurance costs and the cost of credit outstanding to bear. It is for this reason that the establishment of a credit insurance contract is often structuring your company because it forces to adapt your processes to the contractual terms of the credit insurance.
- bad debts contracted after a bankruptcy proceedings concerning your client,
- unpaid without bankruptcy proceedings and due to a dispute, cash problem or dishonesty of the purchaser.
If the purchaser manage to convince the credit insurer that there is a rightful dispute about your invoices you won’t be compensated any more.
Upon compensation paid by the insurer, he will turn against the debtor and will do the necessary steps in case of bankruptcy proceedings (statement of claim, negotiation with the administrator) and actions of collection in other cases. If he manages to get the full payment of the amount due, it is possible that he pay you back the full amount of your claim.
When reporting the unpaid to the credit insurer you grant a mandate for the actions he will initiate for you to recover your bills.The credit insurer becomes the creditor and considers your own client as his debtor. He will cancel the guarantees given to other suppliers of your client who may in their turn cancel credit lines previously established in its favor.
Before sending the record to the credit insurer you can warn your client about the risks he faces. He may change his mind and pay your bills.
The use of credit insurance requires a good receivables management and debt collection. If this is not the case, you will have both insurance costs and the cost of credit outstanding to bear. It is for this reason that the establishment of a credit insurance contract is often structuring your company because it forces to adapt your processes to the contractual terms of the credit insurance.Next step : Bankruptcy Proceedings →
Articles on the same topic
tools to download
Subscribe
Not yet registered? The subscription allows downloading and unlimited use of all files of Credit Management tools.
Blog
All news about collection and credit management
My DSO Manager news: formatting of postmail letters, multi-entity reports and currencies management
How to perform reliable credit analysis during Covid-19 crisis?
Credit tools and My DSO Manager to optimize your company's cash inflows
Covid-19 crisis and credit management: act now!
Happy New Year with Credit Management tools!
Words of experts
Find the latest articles of collections and credit management specialists
How crisis show how people and companies are?
The credit management facing a shock wave
The payment profile, a major advantage for an efficient management of your Accounts Receivable
User reviews
This is a very instructive site for risk takers and risk managers. 
Social networks
Find Credit Management tools on your favorite social networks
Comment this page