Commercial Credit Insurance - general presentation Commercial credit insurance covers the seller against non-payment of his sales

on credit of goods by his national buyers or buyers domiciled abroad, financial losses representing overdue receivables.

Commercial credit is a custom tailored financial management tool used to eliminate the risk of a large unexpected credit loss resulting from the insolvency or past due nonpayment by your customer.

Credit insurance is available from only a limited number of insurance companies in Romania (e.g.: Allianz-Tiriac, Asirom, Asiban, Omniasig) who have specialized departments in this distinctive line of insurance. Considering the size of the business, we can approach international insurers in order to negotiate and conclude the policy with them. (e.g.:Atradius, Coface)

Advantages of purchasing commercial credit insurance Safely expand your business: Increase sales to new and existing customers without the increased risk of non-payment Improved your rating: Many banks will lend more and/or at better interest rates when receivables are insured (the rating of the insured will be better after purchasing commercial credit insurance) Security: Get paid even if your client can't Reduce bad-debt reserves/provisions In addition, premium payment is a deductible expense (fiscal code)

Terms of insurance Type of cover comprehensive cover; this means that the insurance covers a group of operations, not isolated sales. Insured risks - The risk of non-payment of credits due to insolvency of the client. There are many factors that affect the clients insolvency. A buyers solvency is not just the result of the individual ability, but also depends on factors such as the market, the economic climate and the economic sector. Insured sums and deductibles The analysis of the solvency of an insureds clients is followed by the setting up of limits carried out by the insurer. Credit insurance covers the insured for loss of the credit insured, but rarely 100%, usually up to a predetermined percentage. Depending on the risk category, the insureds deductible varies between 5% and 20%. The deductible is the amount that the insured must pay toward his own losses before he can recover from the insurer. Premiums Premiums are calculated by means of a percentage applied to: - The total value of sales declared annually/ insured sums or - The sold of receivables- monthly Period of insurance Usually 1 year insured period .There are covered all the invoices issued in the insured period. Exclusions major force Political risks (war, civil war, strikes, etc) Loss of profit, business interruption Penalties, fines, interests Fraud, bad will

 The loss The determining cause of indemnity is the final incapacity of the debtor to pay, either fully or partially, the amount of the credit. In case of the insured event, the insured must: Notice of non-payment to the insurer in a certain period of time (specified in the policy) Making an accurate claim file which will contain all the necessary documents (as stipulated in the policy): history of payments, notification of the debtor, proves of the measures taken by the insured to recover the debt, situation of the sums recovered by insured. Take all the measures to reduce the risk, including taking steps to obtain the cancellation of the credit, within a reasonable period of time, accordingly to the commercial credit contract between the insured and his client/clients. In determining the extent of the loss, insured and insurer, as participants in the same risk, must be closely united. Not taking actions of an amiable consent without discussion first with the insurer about this;