What does Credit Insurance cost?
This is probably your first question, can I afford a Credit Insurance policy?
Whole Turnover Credit Insurance policies are priced in two different ways, fixed premium polices and rated policies. Both of these methods are based mainly on your estimated turnover for the forthcoming year. Other factors that will affect the price are whether or not you have suffered any bad debts in the last 3 years, what industry you are in, and the size of the credit limits you give to your customers.
Fixed Premium Policies
Minimum premiums for a fixed priced policy start at about £2,500 for a 12 month policy. This figure then increases as the estimated turnover increases. Fixed premiums are often quoted by Underwriters, and the benefit of a fixed premium is that if your turnover at the end of the year is more than you estimated, you won't have to pay any extra premium at the end of the policy year.
Rated policies are priced according to a 'premium rate' e.g. 0.25% which is then applied to your estimated turnover to generate the payable premium. Two premiums are quoted, a minimum premium and an estimated premium. Typically you will pay the estimated premium, and upon declaration of your turnover at the end of the policy year this will be adjusted. Occasionally a rebate will then be owed, or an upwards adjustment will be payable. The premium rate decreases as your estimated turnover increases, for example a business with a turnover of £2,000,000 could be quoted a rate of 0.35% but the same business with an estimated turnover of £20,000,000 could be quoted a rate of 0.2%.
Only want to insure one of your customers?
Most businesses find that a whole turnover policy is the most cost effective solution, however occasionally a single debtor policy is suitable. Premiums for a single debtor policy start at around £3,000 for a 12 month policy, and are priced similarly to the methods above but rather than quoted on your estimated turnover for the year, it is quoted on the credit limit you want to insure.
If you would like an estimated quote for your business, fill in the form below and a Broker will be in touch.
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