Q Please can you tell me if it is possible to insure against a customer going Bankrupt and leaving us with an invoice unpaid?
A The insurance you are enquiring about is called Credit Insurance and yes it does cover you for up to 90% of an unpaid invoice as a result of your customer going into Receivership or Bankruptcy. You can choose to insure specific customers either because you feel they represent a higher risk of insolvency or because they represent a significant portion of your overall turnover, or you can insure the whole of your turnover. The premiums charged by the Credit Insurers reflect the risks they are insuring and therefore you will find a proportionally more competitive premium will be charged for whole of turnover as apposed to selected customers. Any Company with a turnover of over £1m and in some cases below this figure should strongly consider having Credit Insurance after all there is singularly no more likely reason to cause your own company significant financial problems than a customer not paying your invoice. For any readers including yourself who would like a quotation with details of the cover provided please give me a call, also for any readers who already have Credit Insurance it is always worthwhile asking us for a comparison quotation just to ensure you are being charged competitive premiums by your current insurers.
Q We have a fleet of vehicles, one of which is only ever used as a Shunter between our two sites which are little over 200yds apart from each other. We are being charged the same rate for this unit as the rest of the fleet and yet there is clearly a huge difference in risk as some weeks the Shunter does not even move out of one yard. Your advice please.
A You must appeal the rate being charged because firstly your Shunter is not being used for haulage purposes as yet is being charged at the full rate on your fleet policy. Your insurers should be happy to accommodate your risk and substantially reduce the rate on this vehicle, if they do not, then I think serious consideration should be given to changing insurers at your next renewal assuming another insurer can offer an overall saving. I know of some clients who insure a vehicle used as a Shunter in similar circumstances to insure it third party fire and theft only, however you must remember that any trailers then pulled are also subject to only third party cover. Your Shunter vehicle may be only worth a few thousand pounds but if you are towing a customers trailer for example worth several thousand pounds even for the shortest of distances an accidental damage claim if uninsured would cause you considerable financial loss.