TRADE CREDIT INSURANCE FAQS
Who is ARI Global?
ARI Global is the largest, independently owned Specialty Broker of Trade Credit Insurance in the United States. Trade Credit Insurance is our only product. With over a dozen offices across the country, ARI Global has the scope and capability to offer local servicing while collaborating with companies to resolve potential global impacts to their business.
What is Trade Credit Insurance or TCI?
It is a B2B regulated insurance product that protects a business’s accounts receivable, often their largest asset, against losses due to their customers’ financial inability to pay.
Covered losses are insolvency, slow payment and political risk. Consignment sales, pre-shipment and prepayment to supplier coverage are also available.
What is Domestic Credit Insurance?
An insurance policy that protects your sales made within the United States, Canada and Puerto Rico.
What is Export Credit Insurance?
Export Credit Insurance protects sales to most countries around the world. This includes both the commercial risk (financial inability of your customer to pay) as well as political risk (actions taken by the buyer’s country that prevent payments).
TCI acts as an alternative to Letters of Credit, or pre-payments. While these eliminate risk, they can also inhibit sales growth.
How does Trade Credit Insurance help my business?
- Expand sales – Have confidence to drive revenue by selling more to new and existing customers knowing your current receivables are insured with the most coverage and at the lowest cost
- Grow market share – Leverage our knowledge to enter new international markets that may have been previously perceived as too risky
- Strengthen lending relationships – Receive better financing terms as insured AR makes for better collateral
- Avoid catastrophic losses – While infrequent, large credit losses can do severe damage to a business. Unforeseen events can, and do, happen.
- Enhance your internal credit function – Have a cost-free virtual extension of your team by partnering with ARI Global
Why use an ARI Broker?
A broker is the advocate for your business, representing your interests and not the insurance company. At no additional cost to you, an ARI Broker becomes a virtual extension of your credit team, obtains quotes from individual insurance companies to meet your business requirements and monitors in-force policy performance with you.
Your ARI Broker will continue to work with you throughout the years of a policy to provide ongoing support. While our goal is to help you limit any potential losses, ARI will be there to guide you through the claim process.
Does a business need to insure all their customers?
No. Your personal ARI broker can help you identify the options for insuring all your customers, or a segment such as all export business or largest customers. In certain circumstances, a single customer can be insured. Your ARI broker will compare the costs and benefits of each option and provide customized policy language, with the most coverage and at the lowest cost to you.
Is this factoring?
No, factoring is primarily an accounts receivable lending agreement with limited credit risk protection. Generally, a factoring agreement places a lien on all of a company’s assets, allows for notification of the factoring arrangement and direct interaction with a company’s customers.
Trade Credit Insurance only protects against losses due to a business’s customers’ financial inability to pay. While it can enhance a borrowing relationship, it is not a lending mechanism. No liens are involved and is totally transparent to a business’s customers. The customer will not be contacted by the insurance company unless a claim is filed against them.