While it’s possible to get coverage for buyers with less-than-ideal credit histories, it comes with caveats and depends on several factors:

Challenges:

• Insurer Restrictions: Credit insurers generally prefer buyers with good credit scores and solid financial standing, as these present a lower risk of default.
• Limited Coverage: You might only get coverage for a smaller amount compared to customers with an excellent credit rating.
• Higher Premiums: Insuring riskier customers will result in higher premiums to reflect the increased risk.

Options for Coverage:

• Selective Coverage: Focus coverage on specific high-risk buyers where you need the protection most, instead of insuring your entire portfolio.
• Lower Coverage Limits: Accept a lower coverage limit on the buyer to make it more palatable for the insurer.
• Higher Deductibles: Opt for a higher deductible to lower premiums and demonstrate your willingness to share in the risk.
• Government-Backed Programs: Some countries have export credit programs specifically designed to support trade with higher-risk markets, which might offer coverage for buyers with weaker credit.
• Additional Collateral: If possible, you might be able to secure the sale with collateral or a letter of credit to reduce the insurer’s risk.

Factors Influencing Insurer’s Decision:

• Strength of Your Business: If you have a strong track record, good credit management practices, and a diversified customer base, the insurer might be more willing to consider coverage on a riskier buyer.
• Nature of the Transaction: The size of the sale, the length of payment terms, and the industry impact the insurer’s risk assessment.
• Overall Risk Appetite: Different insurers have varying tolerances for risk.

Important Points:

• Transparency is Crucial: Don’t try to hide a buyer’s poor credit history. Be upfront with the insurer for a realistic assessment.
• Alternative Risk Mitigation: If full credit insurance coverage isn’t possible, explore other risk mitigation tools such as factoring or letters of credit.

Ultimately, the decision to provide insurance for buyers with poor credit histories lies with the individual insurer. Start the conversation with potential insurers early to understand their guidelines and determine if coverage is feasible.