FAQ's

1. What is credit insurance?
Credit insurance provides your business with protection against the failure of a customer to pay their trade credit debts. This can arise as a result of your customer becoming insolvent or because your customer fails to pay within the agreed credit period. These risks are referred to as 'commercial risks'. The protection covers as standard goods or services sold and delivered, but can be tailored to cover many other risks such as work in progress and binding contracts.

Companies that export can protect themselves against a range of 'political' risks which may prevent or delay payment. Examples include war or civil war in your customer's country; cancellation of the contract by the government of your customer's country; or governmental regulations such as embargo or quotas that prevent the export or import of goods.

2. Who is Euler Hermes?
Euler Hermes is the world market leader in the field of credit insurance and corporate collections and is a part of the Allianz Group. With offices in more than 50 countries and information on more than 40 million companies, we offer our customers tailor made solutions, providing a company with the tools it needs to grow at a competitive risk premium.

Our strengths:

- One risk database with up-to-date information on more than 40 million companies
- A worldwide network of more than 600 credit analysts monitoring and analysing your risks on a daily basis
- An excellent geographical presence with 53 offices worldwide providing cover for more than 160 countries worldwide
- An international collections network combining knowledge of language, legal system and local habits.
- 6000 professional and motivated employees worldwide making sure you can do business safely.

3. How does credit insurance differ from credit information and factoring?
Credit insurance is different from credit information in that:

- Its opinions are backed by insurance. Information agencies do not typically offer a guarantee to support their opinions.
- Much of the information gathered by Euler Hermes comes from Euler Hermes' own intelligence gathering. This often makes it much more up-to-date than published information which can be over 12 months old.

Credit insurance is different from factoring in that:

- A credit insurer does not finance companies by advancing monies against receivables. However, their activities are complementary.

4. Who uses credit insurance?
For companies of all sizes credit insurance can have a clear added value. Euler Hermes has solutions which suit the needs of the smallest SME up to the largest multi national company. Is your company in one of the following situations, then credit insurance may prove to be a very effective tool:

- Companies that work with very small margins
- Companies looking for access to better financing
- Companies that export
- Companies looking to enter into new markets
- Companies with a limited number of customers
- Companies that are active in branches with high bankruptcy rates

5. Why should I consider using credit insurance?
Research suggests that 90% of companies have experienced business failure among their clients. Businesses protect their tangible assets such as property and plant, but often neglect to cover their receivables which can represent 40% of their current assets.

Credit insurance can reduce the unnecessary cost of bad debt and protect hard-earned success, and provide the cornerstone of secure growth.

6. Are there additional benefits?
There are many additional benefits to using Euler Hermes. These include:

- Development of a higher quality customer base
- Improved continuity
- A reduction in bad debt provisions, thereby releasing tied up capital
- Better risk prevention through the 'early warning' system provided by the credit limits service, and Euler Hermes extensive information database.
- Greater access to finance. A credit insurance policy can be used to provide security to a lender for trade or export finance.
- Better sales targeting - our information can be used to target new customers and markets as well as monitoring existing customers.
- Quick and efficient help in national and international collections cases

7. How much cover is available?
In general, the level of indemnity is 90% but this can vary from 75% to 90%, depending on the type of policy you choose or on your specific requirements.

8. Do I have to insure all my customers and all of my turnover?
The majority of our clients choose this route. However, you can just cover certain markets or your exposure to exceptionally high losses. We will tailor a policy to suit your needs.

9. How soon will a claim be paid?
We will pay a claim within 15 days of confirmation that an insured debt has been admitted to rank in the insolvent estate of your customer, but in many cases we pay considerably quicker than this.

10. Are your services available on-line?
Yes. Our on-line service known as Eolis is available to all our clients. Through it you can request credit limits, monitor existing credit limits and those for which you have applied. Furthermore you can follow the status of your collection files.

11. How much does credit insurance cost?
The cost of a credit insurance policy is directly linked to the risk to which your business is exposed and is related to the amount of turnover that you wish to insure. It varies in relation to where your customers are located, your business' track record [in credit management], the nature of your customers and the trade sector in which you trade. However you will normally pay between 0.1% and 0.5% of your turnover in premium annually*.

* as stated in the disclaimer of this website, no rights can be derived from this estimation

12. How does a policy work?
A credit insurance policy is much more than just claims indemnification. We offer a service that consists of three broad parts:

- Debtor information and monitoring: you request a credit limit for your customer, of which we then monitor the financial status.
- Collections: when your customer is unwilling or unable to pay the debt, Euler Hermes will collect the debt for you in your own country or abroad.
- Claim indemnification: should your customer go bankrupt despite our joint efforts, Euler Hermes will indemnify your loss provided that the claim is covered.

13. What information do I need to provide?
You are obliged to inform us if you receive or become aware of any adverse information about a customer, which suggests that the customer may not be able to meet its financial obligations under the sale or service contract covered by the policy.

14. Can I insure single transactions?
As of January 2006, Euler Hermes and ABN AMRO offer a service package including: debtor information, stand alone collections and transaction insurance. These services are available via the ABN AMRO online banking facility to their customers.

15. Does Euler Hermes provide collections services to non-insured?
Euler Hermes collections - part of the world market leader in collections – also provides collection services to non-insured. This way you can benefit from our international collections network and our local expertise. For collection files for non-insured we have stated a minimum invoiced amount of € 2500.