Excess of Loss
Large companies protect their balance sheet
“Excess of loss” insurance provides protection against substantial debtor losses without the insurer actually interfering with your credit management.
Your structural losses are not covered. However, any unpredictable and unusual risks that may threaten the financial security and even the continuity of your company are included under the cover.
An Excess of Loss policy offers you a number of advantages: in principle the insurer does not impose any credit limits and also does not intervene in the collection of unpaid debts.
You can also partially determine the premium yourself, based on the amount of risk that you want to transfer to the insurer and the part that you are willing to bear yourself.
At the same time, you can still continue to work with your tried-and-tested credit management partners, such as debt collection agencies and commercial information providers.
There are also conditions attached
An Excess of Loss policy is reserved for companies that assess and monitor the creditworthiness of their debtors for themselves.
In practical terms, this means that the company had clearly defined credit management procedures and a properly structured credit management department. The company also needs to keep good records of its credit decisions. Insurers will sometimes audit this aspect of the arrangement at the beginning of the policy. But in any event, the company’s credit management procedures form part of the policy. When a claim is made, the insurance company will check to see that the company has complied strictly with its own procedures.
CRiON plays an important role in guiding clients wishing to apply for an Excess of Loss policy. Some of the points we investigate include:
- Are the procedures clear and comprehensive?
- Are the procedures always adhered to in practice?
- Are the company’s employees sufficiently well trained?
- Is the credit management software up to the task?
- Is everything well documented and kept up to date?
If your company still doesn’t meet these conditions, CRiON will work with you to set up a step-by-step timetable to enable you to comply.
Want more information?
Telephone us to make an appointment by calling: +32 (0)9 244 62 62.
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