Trade credit insurance

Insure your accounts receivable against insolvency

Strategic financial protection that shields your cash flow against commercial bad debt, corporate insolvency, or protracted payment defaults by your B2B buyers.

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Coverage

What trade credit insurance covers

Insolvency Protection

Immediate indemnification of outstanding invoices if a major commercial client enters corporate liquidation or bankruptcy.

Protracted Default Recovery

Financial backup when corporate buyers fail to settle valid, undisputed invoices within the agreed credit period.

Political Risk Extensions

Safeguards cross-border receivables against government moratoria, currency transfer restrictions, or unexpected import/export bans.

Credit Intelligence & Monitoring

Active credit risk assessments and real-time monitoring of your buyers' financial health to prevent bad debt exposure.

The cover

Trade credit insurance in Singapore

Trade credit insurance pays when a business customer does not pay. The policy covers invoices issued on open-account terms, usually with payment due within 12 months. Singapore exporters, commodity traders, distributors and manufacturers buy it when one buyer is a large share of receivables, when a bank asks for insured receivables before lending against them, or when sales move into markets where buyer information is thin. Receivables can be 40% of a company's balance sheet assets, so the exposure is rarely small.

It is not a guarantee of every invoice. Cover applies only to buyers with a credit limit in place, and the insurer pays an insured percentage, commonly 75% to 90% of the debt. Policies run for one year on a whole-turnover, key-account, single-risk or excess-of-loss basis, priced as a rate on insured sales. The broker structures the policy, obtains buyer limits from the insurer, sets up the loss-payee wording a bank requires, and manages overdue reporting and claims.

Who buys it

  • Exporters selling on open account into Asean, China, India or the Middle East.
  • Commodity and electronics traders with one buyer carrying a large share of receivables.
  • Distributors and wholesalers giving 60 to 90 day terms to retailers and contractors.
  • Companies whose bank will lend more against receivables insured with a loss-payee clause.
  • Firms with sales above S$5 million a year, the scale at which insurers quote most readily.
  • Suppliers entering multi-year contracts or new markets with limited buyer information.

What the insurer needs to quote

  • Sales turnover and bad-debt history for recent years
  • Aged receivables ledger by buyer and country
  • List of largest buyers with the credit limits requested
  • Standard payment terms and the credit control procedure
  • Audited accounts and any existing financing against receivables
  • Details of disputed, overdue or previously claimed debts

Price and terms

What moves the premium

Insured turnover
Premium is a rate applied to insured sales; Marsh Singapore puts the cost at below 1% of revenue for most portfolios.
Buyer quality and spread
A portfolio of many rated buyers prices lower than one with a few weak or unrated buyers; concentration raises the rate and the deductible.
Countries sold into
Export buyers in markets with transfer restrictions or weak insolvency regimes attract a political risk loading and lower limits.
Payment terms
Longer terms increase the exposure the insurer carries; terms longer than those on the policy schedule need the insurer's agreement before the sale.
Loss history
Past bad debts set the starting point for the rate, the deductible and any aggregate first loss the insured keeps.
Insured percentage and structure
A 90% indemnity costs more than 80%; excess-of-loss and key-account structures cut premium by leaving smaller buyers uninsured.

At renewal

Three mistakes we see most often

Trading above the limit
Cover stops at the credit limit on each buyer, and shipments above it are uninsured. Apply for an increase before the order is accepted, and use the discretionary limit only with the justification the policy names.
Assigning the policy without consent
In Marketlend v QBE Insurance (Singapore) [2025] SGHC(I) 1 the claim failed because the policy had been assigned to a financier without the insurer's written consent. Ask the insurer for a loss-payee endorsement or written consent before any receivables financing is signed.
Late overdue reporting
Policies set a deadline to report an overdue account and to stop shipping, and missing it voids the claim on that buyer. Put the policy dates into the credit control calendar and report on time even when the buyer promises payment.

Questions

Questions buyers ask

How much of an unpaid invoice does trade credit insurance pay?

The policy pays an insured percentage of the debt, not the whole amount. Allianz Trade's Singapore FAQ quotes up to 90%; Marsh Singapore cites 75% to 90% as the usual range. Payment is also capped at the credit limit held on that buyer, so a S$500,000 debt against a S$300,000 limit at 90% pays S$270,000. The uninsured share keeps the seller's own credit control in play.

What is the difference between insolvency and protracted default?

Insolvency is a legal event: liquidation, judicial management, bankruptcy or a scheme of arrangement. Protracted default is a buyer that is still trading but has not paid within the agreed terms. Insolvency claims are paid once the event is proved. Protracted default claims are paid after a waiting period; Allianz Trade's regional FAQs cite about five to six months from claim filing, and Atradius names six months as normal.

How do buyer credit limits and discretionary limits work?

Each buyer needs a limit in place before a loss. An approved limit is set by the insurer after it assesses the buyer. A discretionary limit lets the seller set its own limit up to a threshold, justified by a recent credit report, the insurer's credit opinion or trading experience within the justification period. Insurers can cut or withdraw approved limits on adverse news, usually with 30 days notice; goods shipped before that date stay covered.

Does the policy cover export sales and political risk?

Yes, when the export markets are declared and the political risk extension is included. Political risk covers non-payment caused by events in the buyer's country: war, government cancellation of a contract, import or export bans, or currency transfer restrictions that stop a solvent buyer paying. Each country carries its own limit and rate, and sanctioned countries are excluded.

Can a bank lend against insured receivables?

Banks lend more readily against receivables that are insured, and some make it a condition of invoice financing. The usual mechanism is a loss-payee endorsement naming the bank, or the insurer's written consent to an assignment of policy proceeds. Doing either without the insurer's consent breaches the policy; the Singapore International Commercial Court dismissed a trade credit claim on that ground in January 2025.

Is there government support for trade credit insurance premiums in Singapore?

Enterprise Singapore has run a Trade Credit Insurance Scheme that paid 50% of the minimum premium on policies from Singapore-registered credit insurers, capped at S$100,000 per company in aggregate, for firms with group turnover of S$100 million or less and paid-up capital of at least S$50,000. The last published extension ran to 31 March 2021. Confirm current availability with Enterprise Singapore before budgeting for it.

Sources: Allianz Trade Singapore FAQ, Enterprise Singapore (IE Singapore) TCIS and PRIS terms, 2015, Marketlend v QBE Insurance (Singapore) [2025] SGHC(I) 1, Allianz Trade: discretionary and approved limits

Deep domain expertise

Placed for the businesses that carry this risk

Wholesale and distributionProtect stock in the warehouse and on the road, and sell on credit terms without carrying the bad debt.See more →ManufacturingKeep the line running after a breakdown, defend against product liability, and recover lost income while the plant is down.See more →Logistics and freightKeep cargo moving through every handover, cover the fleet and the warehouse, and settle claims before the next shipment.See more →

How TRS places it

From the first review to every claim after it

1

Review

A named broker reads the current policy against how the business runs today and lists the gaps.

2

Market

TRS takes the risk to the insurers with appetite for it and sets the quotes side by side: premium, deductibles, exclusions.

3

Manage

The same team handles mid-term changes, renewals and the claim, from first notice to settlement.

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