Trade Credit Insurance
When tariff increases squeeze your buyers' margins, they may not be able to pay. Trade credit insurance protects up to 90% of your accounts receivable — so a customer's financial trouble doesn't become yours.
What Is Trade Credit Insurance?
Trade credit insurance (TCI) — also called accounts receivable insurance or export credit insurance — is a policy that protects your business when a customer fails to pay for goods or services you've already delivered.
Think of it as insurance for your invoices. You ship the goods, issue the invoice, and if the buyer defaults — due to insolvency, protracted default, or in some cases political events — the insurer pays you a percentage of the outstanding balance, typically 80–90%.
The policy also includes an ongoing credit monitoring service. Your insurer tracks the financial health of your buyers and alerts you before problems become defaults.
How It Protects Against Tariff Risk
Tariffs create financial stress throughout supply chains. Here's how that stress can reach your receivables:
Buyer margin compression
When your buyer is an importer, tariff increases directly reduce their margins. Squeezed buyers may slow payments or default entirely.
Demand disruption
Higher prices from tariffs reduce demand for goods, causing buyers to carry excess inventory and delaying payment.
Supply chain restructuring costs
Buyers scrambling to restructure supply chains may face temporary cash crunches that affect their ability to pay.
Tariff dispute clauses
Some newer TCI policies include tariff disruption riders that activate coverage when tariffs on specific goods exceed a threshold.
Who Needs Trade Credit Insurance?
Importers
- Sell on credit terms to domestic retailers
- Have buyers with concentrated tariff exposure
- Need bank financing secured by receivables
Exporters
- Sell to foreign buyers with country risk
- Need foreign buyer credit monitoring
- Want to extend competitive credit terms safely
Manufacturers
- Supply to industries heavily affected by tariffs
- Have high concentration in a few large buyers
- Need to protect working capital
How Much Does It Cost?
Premiums are calculated as a percentage of insured annual revenue (your covered receivables). The rate depends on:
Typical cost range: 0.1% – 0.5% of insured revenue
Example: $10M in covered receivables = $10,000–$50,000 per year. Most businesses find this less than the cost of a single bad debt.
Top Trade Credit Insurance Providers
Allianz Trade
formerly Euler HermesLarge corporates, $50M+ annual revenue
$25,000/year
- Comprehensive buyer monitoring
- Global credit intelligence
- Strong in Europe and Asia
- Industry-leading claims handling
Atradius
Mid-market companies, $10M–$500M revenue
$15,000/year
- Flexible policy structures
- Strong US market team
- Sector-specific expertise
- Good online policyholder portal
Coface
Smaller businesses and international expansion
$8,000/year
- Accessible for smaller businesses
- Modern technology platform
- Fastest growing in US market
- Competitive pricing on smaller accounts
* Pricing is approximate and varies by account profile. Always get quotes from multiple providers through an independent broker.
Get Quotes From All Three Providers
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