Trade credit insurance helps protect payment for goods and services in light of the risks involved in doing business overseas, such as political turmoil, bankruptcy or other insolvency issues.
Boyne, co-chair of Gunster’s insurance law practice, stresses the importance of a big-picture approach when assessing exactly where potential risks lay, be it with particular vendors, goods or countries.
Reasonable expectations about how much protection an insurance policy can offer a company is also important, Boyne says in the article. A policy won’t cover all potential losses, so a 75- to 80-percent recovery for a particular transaction may be it. Even getting 65 cents on the dollar can be really good, he says, especially if you’re dealing with a country with a flailing economy such as Venezuela.
Exporters with more than $1 million in annual overseas sales should consider trade credit insurance, Boyne says.
In the article, writer Elaine Pofeldt goes on to describe four helpful tips for U.S. exporters to help identify their insurance needs as well as how to keep policy costs down.
Read the entire article: Payment protection: What you need to know about trade credit insurance (Global Trade Magazine, 8/1/16)
Boyne is a shareholder in Gunster’s Jacksonville office. He has a broad range of corporate legal experience, including serving as in-house counsel at Barnett Bank.