Debunking the policy: Financiers

Financiers looking to access a policy? No problem! 

Obtaining finance is a key part of the operations of many businesses, it’s essential for funding expansion, advertising, investing in new infrastructure and generally supporting day-to-day business operations.

Finance can come from a variety of sources, bank loans, factoring facilities or invoice discounting to name a few but it can be beneficial for the providers of such finance to have access to your client’s trade credit insurance policy.

Here’s how they can do it:

Hands-off approach

At any point in time, a customer can request that a valid, approved claims payment isn’t paid into their own bank account but is paid into the bank account of another entity i.e. their financier’s providing the financier is able to receive the money in the same currency as the policy currency.

This is a simple, no fuss approach but doesn’t give the financier any securities.

Loss Payee

In some ways similar to the above, the financier can be named on the policy as a ‘Loss Payee’. This simply means that any and all claims approved for payment will be made to the Loss Payee automatically. The Loss Payee doesn’t have any rights under the policy and neither do they have any obligations however the Payee is allowed in the event of the insured’s insolvency to work with us to finalise and process any outstanding claims.

Trade Financier

If the financier wishes to be more involved in the policy they can be included as a ‘Trade Financier’. This route effectively adds the financier as a Joint Insured to the policy however, their obligations are joint but not several. This means that either or, the financier or the Insured can ensure the policy terms and conditions are met. Like the Loss Payee route, any claims approved for payment are automatically paid to the Trade Financier.

A further benefit to the financier of being added as a Trade Financier is that in the event of the insured’s insolvency, the financier has step-in rights meaning they can ensure any premium payments are up to date, administer any outstanding claims and help us to ensure any other policy conditions are met to preserve the integrity of any possible claims payments. Don’t forget, once an insured has entered into insolvency the policy ceases at that date so any step-in rights are in order to cover shipments or services already provided before the date of insolvency.

However, if a financier is looking for total control we do have options at Atradius for a financier to take out a policy in their own right by using our Modula Finance Policy.

If you’d like more information on this or any of our Atradius products please reach out to your usual contacts and they will be happy to discuss.