Business, like life at times, often feels like a game of chess. The strongest pieces need to be in the right place for deployment at the optimum moment. And of course the overriding objective is to protect your King and avoid a Checkmate. Hence the content of our post entitled "Be Ambitious but be Smart with it to StressBust™ effectively".
We talked in our previous posts entitled "Have a "Plan B"" and "Learn to Expect (and Accept) the Unexpected to Stressbust™ More Effectively" about the importance in a personal context of not putting all your eggs in one basket and planning ahead, both mentally and financially, for multiple eventualities.
Potential personal solutions to this were then provided in our subsequent post entitled "Wills, Insurance, Powers of Attorney & Life Planning as Stressbusting™ Essentials".
These posts were followed by our exclusive StressBustingExpert4Business™ post entitled "Make Insurance relevant to StressBust™ optimally" that explained the criticality of insurance to businesses generally, described considerations to bear in mind when sourcing a provider and choosing coverage, and impressed the importance and benefits of engaging with a proactive broker.
A specific further form of insurance that may be of value to businesses of any size is called CREDIT INSURANCE.
Credit Insurance, in a nutshell, is a variety of insurance under which, in return for an annual premium, a business can be afforded financial support in the event of damage to income resulting from the loss of a policy listed key customer, whether through, for example, that customer's insolvency or other policy defined circumstances resulting in a customer's inability to settle invoices as they lawfully fall due.
Credit insurance coverage is usually for a fixed duration from point of loss and the security affords a business time to take stock and realign, while mitigating the overall damage by a payment or series of payments out.
The precise form and duration of financial loss covered, and the % of coverage, usually depends on the level of premium paid.
This type of insurance can be particularly valuable where, say, a business relies heavily for the majority of its revenue on a single customer or just a small number of customers, meaning loss of only one unexpectedy would hit its balance sheet immensely hard. Imagine, for example, that a pivotal strategic partner customer along the lines of that outlined in our post entitled "How to make Strategic Partnerships work for you" entered insolvency and could not pay you what you were owed or deliver further contracted value - how would this affect your business in the whole?
We have observed first hand companies that would otherwise have gone out of business surviving and then flourishing once again precisely because they expended the effort of putting this type of coverage in place as part of their business chess position.
Credit insurance coverage also demonstrates to funders and partners of the business prudent corporate governance and risk management, so its brand bolstering potential to the professional and fund communities is not to be overlooked either.
However, it is imperative to seek guidance on this more bespoke form of insurance from a regulated expert broker who can lead you through the whole insurance cycle.
If you can relate to the contents of this post and would like us to make an introduction to such a regulated specialist able to assist, feel free to reach out to us in confidence via our "Contact" page.
For further information in this regard, please consult our "Legal Notices" page.