Depending on the nature of the business, accounts receivable represent substantial proportion of business assets. They frequently run above 40 percent. Thus, they are no less important than fixed assets, which are normally covered under property insurance policy.

Credit insurance provides efficient transfer of risk of customer payment defaults due to insolvency and protracted payments. Credit insurance not only indemnifies bad debts.

Credit insurance provides efficient transfer of risk of customer payment defaults due to insolvency and protracted payments. Credit insurance not only indemnifies bad debts.

Important element of credit insurance relationship between an insurance company and the insured company is credit limit setting. Credit insurance company credit checks (larger) clients of the company and sets the credit limits.