You buy insurance for many reasons, but the main one is, to paraphrase Chris Rock, in case bad things happen. This is a fair assessment of why insurance exists and why we need it.
With trade credit, few seem to think that bad things will happen. Perhaps this is due to the added attention accounts receivable receives: regular reviews of your aging, daily cash position, etc. On other hand, businesses carry insurance for every conceivable catastrophe for which the odds are extremely low: fire, flood, faulty products, and others types.
Few business owners check their fire sprinklers on a daily basis. But even if they did, doing so would not diminish the prudence in having fire insurance.
The same is true for trade credit. Just because you stay in regular contact with your clients and check your aging, you still need to take that extra measure of common sense, and that is insuring against the possibility that your best customers can become insolvent.
Now after you’ve checked your aging, you should take a look at obtaining a trade credit insurance policy, because bad things can happen.
You may also want to check your fire sprinklers.