This blog is about protecting cash flow, especially if those that owe money go bust.
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What if a buyer goes bust?
With the global recession and Brexit, business owners are having to consider the impact this could potentially have on their business. What if a client goes bust? If a company is owed significant amounts of money from clients, it is a major risk to cash flow.
Gareth came to us with these questions and more. He knew exactly what he wanted from an insurance. Dealing with imports he needed peace of mind that he had cover if stock went missing. He also needed to know that his invoices were covered if products didn’t reach the consumer. We took time to completely understand Gareth’s business to a granular level.
What if they don’t want to pay?
Business Owners need confidence that they are going to get cover that matched their needs and not be sold an off the peg insurance that doesn’t quite do the job. After negotiating with underwriters we carefully selected the options that matched Gareth’s broad requirements.
One option included protection against protracted debts or liquidations relating to companies that had been invoiced. It often helps with obtaining quicker payments, from companies that are happy to share the debt, when the risk of a default is backed by credible protection.
What are the risks when reducing risks?
Following up with a meeting to go through the small print and fully explain terms, conditions and exclusions is a must. We tell it like it is, the good and the bad so our clients can make informed decisions.
The devil is in the detail and it is often a surprise to everyone, including us, when it is interpreted based on a particular business. It’s our duty to actually recommend protection that fits each client and the most appropriate has to meet their needs, rather than provide the dreaded false sense of security.
Wrap up: Small print can be seen as an enemy yet there’s a lot that can be learned from it. Read our blogs on the different types of policies available. I used to be surprised at the number of people that told me that they had already covered everything, then sent me documents riddled with exclusions. I now know it is a common occurrence in our sector.
Top Tip
Some people find out when it’s too late. Review your debtors regularly and watch out for slow payers and avoid companies that are shown as risks on credit checks.
