This article is broken down into 6 key sections, with the intent of helping you understand the process of determining your credit risk insurance needs and then how to buy it.
2. Locate the Right Credit Risk Specialist to Assist You
Why this is important, what to look for
Credit insurance can be an extremely valuable tool for your company, and one that more than pays for itself in any number of ways as previously noted. However, as a custom tailored program, there is no standard “off the shelf” policy you can buy that will automatically be the right fit for your specific needs and circumstances. Further complicating the matter is the fact that there are only a few providers specializing in this type of coverage, and they each have their own risk appetites, underwriting philosophies and contract wording.
Ideally, you will seek the assistance of a credit insurance specialist. When looking for someone to help you shop for this type of coverage, you want to be sure that you are dealing with a specialist who meets the following minimum qualifications:
- Has as their primary if not exclusive focus, the implementation and management of credit insurance.
- Is licensed to do business in your state and is in good standing with state regulators.
- Has appointments to represent and is in good standing with all of the providers in the market, and preferably has what is known in the industry as “direct writing” authority. That is, they work directly with the carrier’s underwriters vs. having to go through other representatives of the carrier.
- Has established staff, resources and procedures to support both shopping for the policy and assisting with ongoing policy management.
Tell me more about Global Commercial Credit Insurance.
Specialist brokers who deal exclusively with credit insurance are more likely to have a deeper understanding of each carrier’s philosophy, risk appetite and contracts. They will be able to lead you to the ideal solution in the least amount of time, and ideally save you unnecessary paperwork and money. Most brokers do not charge any additional fees, and under insurance industry regulations, the premiums quoted through your credit insurance broker are priced the same as if you were to secure them directly from the carrier.
While some of the carriers do have their own agent networks, dealing with a competent specialist broker opens you up to more market options, and objective expertise and decision support. Your broker’s loyalty is to you and to helping you maximize the value of your investment in credit insurance.
It is important to note here that in the US marketplace, there are less than 10 traditional credit risk insurance markets to go to, and several would be considered more specialized vs. mainstream underwriters. In light of this, you will want to select one broker partner to work with. If you solicit more than one broker, you will find they end up going to the same carriers. One competent broker can effectively cover all of the market options for you, and you will avoid a lot of unnecessary confusion and complications that would arise if you try to put more than one broker to work on your behalf.
When talking with a credit insurance broker, you should expect to find someone who is interested in understanding your perceived needs and uses for credit risk insurance, and who is interested in learning about your company and the direction management wants to take the business. The best specialist brokers are the ones who do the most listening and ask a lot of questions. Since every policy is custom tailored for each client’s needs, the more your broker knows, the better the job they can do for you.
Your specialist broker can provide you with detailed information on credit insurance, including the various carriers’ financial standings and ratings, specimen policies and help you with comparative analysis of the options available to your business. In terms of ongoing support, your broker should also be able to assist with account research, coverage requests, claims filings, helping you understand the minimal reporting requirements some carriers have, negotiating renewals and shopping for account coverages you may need outside your primary policy. In short, your specialist broker is your outside expert and partner.
(248) 646-9400 – http://www.gccrisk.com
Credit Insurance In Depth 