Financial risk insurance is a specific area of insurance that primarily covers the ability to meet your obligations to your clients, or vice versa, your customers to you. The range of policies is constantly expanding, you can insure both risky invoices and the ability to repay, as well as contractual guarantees. Get to know the policies available on the market so you know your options.
What is financial risk insurance for and what types exist?
In the previous part, you learned that you can insure yourself gambling data china against liability for damages caused by your company to clients through negligence, accident, or product defect. In this part, you will learn about insurance policies that focus on financial obligations. These include solvency insurance, receivables insurance, and bankruptcy insurance.
What insurance is worth it?
When choosing suitable insurance and expanding it, consider the specifics of your business and tailor your insurance package to suit you. Not every entrepreneur needs all the coverage available on the market. The most popular business insurance is receivables insurance. Over 50% of entrepreneurs will encounter at least one unpaid invoice, which can disrupt the company’s finances.
There is no insurance like a fuse
The amount and scope of coverage vary between insurance companies, so before taking out any policy, clarify the biggest risks in your field and find out what each insurance company can offer you. What one provider has in its basic offer, another may not have, even for an additional fee.
Insurance of receivables or invoices
A hit among entrepreneurs is receivables insurance , which offers audience profile examples the possibility of covering selected risky invoices. For business partners that you do not know well and whose payment history is not verified, insurance is definitely worth it. If the customer does not pay the invoice on time, the insurance company will take over the collection of the invoice. If it is unsuccessful within 90 days, it will pay you 85% of the amount owed from its own funds.
The price of insurance ranges from 1 to 2% of the insured amount. The final amount is mainly influenced by the customer’s payment habits and financial situation.
What to watch out for
Before you embark on a risky contract, find out whether thailand data the receivable will be insurable. Customers must meet certain criteria for the insurance company to guarantee them. Verification is quick. For example, on the ČSOB insurance website you can use an online form where you fill in your contact details, an insurance advisor will contact you to discuss the situation with you. Try the service
Insurance or invoices
A long-term illness, disability, or even the death of a key employee or yourself can put your business out of business, but the obligation to repay your business loan will remain. Business loan repayment insurance will protect you from such a situation.
What to watch out for
Before you sign a contract, check the waiting period and the amount of the payment. For mortgages and credit cards, also check the financial payment limits. If the amounts involved are higher, the insurance may not be enough to cover you fully. You should have at least 2 installments in reserve so that you don’t start to incur penalties before the insurance company checks the whole thing and takes over the installments for you.
Contractual warranty insurance
For larger contracts, it is common practice that the contractor must guarantee the timely and accurate completion of the contract with a contractual guarantee, or a fixed percentage of the total contract price. In the event that the contractor is late or does not deliver the work to the required extent, the client is entitled to use the contractual guarantee to correct and complete the work.
For these cases, companies can take out insurance that will provide a guarantee for them. Before taking out this policy, the insurance company thoroughly checks the company’s financial health, previous references, and completed projects.