Protect against bad debt risk

What companies need to know about trade credit risk and insurance

Any sale carries risk.

With every sale, there is a chance the buyer will not pay. And non-payment can be damaging, or even catastrophic, to a seller. One or two bad debts can wipe out our profits for the year, said one chief executive officer that was interviewed for this white paper. If a business operating on a low margin, e.g. 5%, doesn’t get paid, they likely won’t be in business for long.

Unpaid invoices of accounts receivables can represent up to 40% or more of a company’s balance sheet assets. And bankruptcies happen more often than you’d think. Nearly 30,000 North American businesses failed in 2014.

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