Top 5 Misconceptions About Trade Credit Insurance

Top 5 Misconceptions

Ever worry about what might happen if one of your biggest customers suddenly couldn’t pay? You’re not alone. In today’s unpredictable economic climate, protecting your business against the risk of customer non-payment is more important than ever. That’s where trade credit insurance (TCI) comes in.

At Atradius, we talk with companies every day that are curious about TCI but may be hesitant because of common misconceptions. Let’s break down the top five misconceptions and show you how TCI really works. Stay informed by checking out our latest reports and updates here.

Misconception #1: “Trade credit insurance is only for large corporations.”

TCI is scalable and accessible for businesses of all sizes, from small suppliers to global exporters. In fact, many small and medium-sized enterprises rely on trade credit insurance to grow safely and confidently, especially when expanding into new markets or working with unfamiliar customers.

A common mistake is the assumption that TCI is too complex or expensive for smaller businesses, but truthfully, it may be one of the smartest investments made in any business. With a TCI partner, your business has access to global data, predictive analytics and international collections networks that may not be easily available otherwise.

Misconception #2: “If I have loyal customers, I don’t need trade credit insurance.”

Even the most trustworthy customers can fall into hard times. Market conditions change, supply chains falter, and businesses go bankrupt. sometimes this happens without warning. TCI isn’t a reflection of distrust but a proactive strategy to safeguard your cash flow and business continuity.

Think of it like any other insurance. You hope you never need it, but you are grateful it is there when something goes wrong.

Misconception #3: “Trade credit insurance only protects me after a loss.”

TCI isn’t just reactive, it’s preventive. Atradius provides ongoing credit monitoring, risk assessments, and alerts that help businesses make smarter credit decisions before a sale even happens. That added layer of insight can be just as valuable as the coverage itself. Being more informed and in control can lead to better business decisions.

With Atradius, most claims are settled quickly and fairly, typically covering 90% of the invoice amount insured. This saves time and stress of chasing unpaid invoices.

Misconception #4: “It’s too expensive.”

Many businesses are surprised by how affordable TCI actually is, especially when compared to the cost of a major unpaid invoice. Plus, having credit insurance can help you secure better financing terms and confidently extend more competitive payment options to customers, leading to growth.

The ROI of trade credit insurance often extends beyond risk mitigation into better business relationships and increased revenue.

Misconception #5: “My customers will think I don’t trust them.”

Trade credit insurance is a back-office tool. Your customers won’t even know you have it unless you tell them. And if you do? Most customers will appreciate the extra layer of protection and may see it as a sign you’re managing your business responsibly. In today’s economic climate, managing risk and protecting accounts receivables is smart for any business.

Trade credit insurance isn’t about expecting the worst, it’s about being ready for anything. Whether you’re protecting your bottom line, seeking to grow with confidence, or just looking for better credit insights, TCI can be a powerful ally.

Have questions? Atradius experts are here to help you navigate your options and find a solution that fits your business. Contact Atradius today to explore how trade credit insurance can support your business growth, without the myths.

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