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Trade Credit Insurance

Trade Credit

Trade credit insurance (credit insurance, debtor’s credit protection) is an insurance policy taken by a trade creditor to cover losses arising from events that prevent the debtor from paying the full amount of debt.

Trade credit insurance protects the creditor from non-payment by the debtor and may be a condition of granting credit.

It differs from other forms of insurance in that it is not purchased to protect the life or property of the policyholder, but rather to protect against risks related to debtors’ ability or willingness to pay debts which they have contracted with an entity or business.