Credit insurance
Credit insurance — also called trade credit insurance or accounts receivable insurance — pays your business if a customer fails to pay a legitimate invoice. It protects your receivables when a buyer goes insolvent, defaults, or you sell internationally on credit terms. RiskCube compares carriers and places it fast.
Most companies get quotes within 1–2 business days
Who needs credit insurance and why does it matter?
Credit insurance is driven by how you sell — if you invoice other businesses on payment terms, a single customer's insolvency can wipe out months of margin. It matters most when receivables are large, concentrated, international, or pledged to a lender.
B2B companies selling on net terms
SaaS, services, and hardware companies that invoice customers on net-30/60/90 terms carry the buyer's non-payment risk until the invoice clears. Trade credit insurance protects those open receivables if a customer cannot pay.
Companies with customer concentration
When a large share of revenue comes from a handful of big accounts, one customer's bankruptcy can threaten your runway. Credit insurance caps that concentrated exposure so a single default is survivable.
Exporters and international sellers
Export credit insurance covers non-payment by foreign buyers and, in many policies, political risks like currency inconvertibility or government action — key for hardware, deep-tech, and space companies selling overseas.
Companies borrowing against receivables
Lenders advance more — and at better terms — against insured accounts receivable, because the credit risk shifts to a rated insurer. For companies using venture debt or an AR line, credit insurance can directly increase available capital.
Hardware & deep-tech shipping on terms
Companies that manufacture and ship physical product before payment have real capital tied up in delivered goods. Credit insurance protects the value of that shipped inventory if the buyer fails to pay.
AI-native trade & sourcing platforms
AI-native platforms connecting US buyers with overseas suppliers facilitate cross-border deals on credit terms between parties who've never met. Credit insurance is the trust infrastructure that makes the transaction safe — protecting the party that ships goods or extends payment terms against a foreign counterpart's default.
"Two customers were 60% of our revenue. RiskCube put trade credit coverage on both — now a default from either one won't take us down, and our lender raised our borrowing base."
What is credit insurance?
Credit insurance — used interchangeably with trade credit insurance and accounts receivable insurance — is a policy that protects your business against the risk of a commercial customer not paying. If an insured buyer becomes insolvent or defaults beyond the policy's terms, the insurer reimburses up to 90% of the unpaid invoice. For many B2B companies, accounts receivable is the largest asset on the balance sheet — this coverage protects it. The product works across three pillars: prevention (ongoing buyer monitoring and credit intelligence), collection (the insurer pursues overdue amounts on your behalf before a claim is paid), and indemnification (reimbursement if recovery fails).
Example situations:
- A hardware startup ships $400k of product to an enterprise customer on net-60 terms. The buyer files for bankruptcy before paying. The credit policy reimburses the covered percentage of the invoice instead of the loss hitting runway.
- A deep-tech company sells to an overseas buyer. Export credit insurance covers the foreign buyer's default and the political risk that a government action blocks payment.
- A founder wants a larger AR credit line. Because the receivables are insured, the lender advances a higher percentage against them and lowers the rate.
Note: business trade credit insurance is different from consumer "credit insurance" that pays off a personal loan on death or disability — that is a separate, unrelated product.
What's covered
Customer insolvency
The primary covered event. If an insured buyer becomes bankrupt or legally insolvent, the insurer reimburses the covered percentage of the unpaid invoice.
Protracted default (non-payment)
If a solvent customer simply fails to pay a legitimate invoice beyond the policy's waiting period, the policy responds — you do not have to wait for a formal bankruptcy.
Export & political risk
Export credit policies cover foreign-buyer non-payment and, in many cases, political events like currency inconvertibility, contract frustration, or government action blocking payment.
A large share of each invoice
Policies typically indemnify 75–90% of a covered receivable, up to the credit limit the insurer assigns to each buyer.
Collections support
Many trade credit policies include access to the insurer's collections and recovery team. Before a claim is paid, the insurer works to collect the overdue amount — reducing the loss and your administrative burden.
Enhanced borrowing capacity
Insured receivables are more financeable — lenders extend a higher borrowing base against them, unlocking working capital for growth.
Coverage varies by policy terms, conditions, and buyer credit limits.
What is not covered
Disputed invoices
If the customer withholds payment because of a quality, delivery, or contract dispute, the policy does not pay until the dispute is resolved in your favor. It covers inability or unwillingness to pay a legitimate, undisputed debt.
Accounts already overdue
Buyers who are already in default or past due when you bind the policy cannot be insured retroactively. Coverage applies to future credit sales, not existing bad debt.
Amounts above the buyer credit limit
The insurer sets a credit limit per buyer. Sales beyond that approved limit, and the uninsured coinsurance percentage, are retained by your business.
Your own non-performance
Non-payment caused by your failure to deliver goods or services as agreed is not a covered credit loss — that is a performance issue, not a buyer credit event.
Varies by carrier and policy wording; consult your broker for specifics.
Not sure how much of your receivables book to insure? Talk to an expert
up to 90%
of each covered invoice can be reimbursed when an insured customer fails to pay
From application to Certificate of Insurance (COI), often in ~24 hours
Assess your unique risk profile
~10 min · one-time form
Complete a short digital intake form so we can understand your unique risk profile, your industry, stage, contracts, and exposures.
AI & brokers scan the market
Top-rated carriers compared
Our AI agents and licensed brokers scan the market's top-rated carriers to find the best quotes for your business.
Close the deal with proof of coverage
Vendor-ready in ~24 hours
We present the options that satisfy your vendor requirements and get you proof of coverage, so you can close the deal.
Assess your unique risk profile
~10 min · one-time form
Complete a short digital intake form so we can understand your unique risk profile, your industry, stage, contracts, and exposures.
AI & brokers scan the market
Top-rated carriers compared
Our AI agents and licensed brokers scan the market's top-rated carriers to find the best quotes for your business.
Close the deal with proof of coverage
Vendor-ready in ~24 hours
We present the options that satisfy your vendor requirements and get you proof of coverage, so you can close the deal.
FAQs About Credit Insurance
Direct answers to trade credit coverage, what it protects, and how it is priced. Every response is verified by licensed brokers at our California-licensed brokerage.
Getting started
What is credit insurance?
Credit insurance — also called trade credit insurance or accounts receivable insurance — protects your business against the risk that a customer fails to pay what they owe. If an insured buyer becomes insolvent or defaults beyond the policy's terms, the insurer reimburses a percentage of the unpaid invoice (commonly 75–90%). It protects accounts receivable, which for many B2B companies is the single largest asset on the balance sheet.
Is credit insurance the same as trade credit or accounts receivable insurance?
Yes — the three terms are used interchangeably. "Trade credit insurance" is the formal industry name, "accounts receivable insurance" describes what it protects, and "credit insurance" is the common short form. All refer to the same product: coverage that pays your business when a commercial customer fails to pay an invoice. (This is different from consumer "credit insurance" that pays off a personal loan — a separate, unrelated product.)
Do startups need trade credit insurance?
It depends on how you sell. Startups that invoice other businesses on net-30/60/90 terms — especially those with large enterprise customers or revenue concentrated in a few accounts — carry real non-payment risk. If one big customer going insolvent would materially hurt your runway, trade credit insurance protects that receivable. Startups paid upfront (most B2C SaaS, prepaid subscriptions) generally do not need it.
Coverage basics
How much of an unpaid invoice does credit insurance cover?
Most trade credit policies reimburse 75–90% of a covered invoice, up to a credit limit the insurer sets for each buyer. The remaining percentage (coinsurance) is retained by your business, keeping your incentive to sell to creditworthy customers aligned with the insurer's. The exact indemnity percentage and per-buyer limits are set during underwriting based on your customers' financial strength.
Does credit insurance cover international and export sales?
Yes. Export credit insurance covers non-payment by foreign buyers and, in many policies, political risks such as currency inconvertibility, import/export license cancellation, or government action that prevents payment. This is especially relevant for hardware, deep-tech, and space companies selling to overseas customers or government entities. Coverage terms vary by country risk rating.
What is not covered by credit insurance?
Trade credit insurance does not cover disputed invoices (a quality or delivery dispute must be resolved first), accounts already overdue when you bind coverage, losses above the credit limit the insurer set for a given buyer, the uninsured coinsurance percentage, or non-payment caused by your own failure to deliver. It covers a buyer's inability or unwillingness to pay a legitimate, undisputed invoice.
Cost & structure
How does credit insurance help me borrow more against receivables?
Lenders discount unsecured accounts receivable heavily when setting a borrowing base. When your receivables are insured, the credit risk transfers to a rated insurer, so lenders will typically advance a higher percentage — often at better terms — against insured invoices. For companies using venture debt or an AR credit line, trade credit insurance can directly increase available capital.
How much does trade credit insurance cost?
Premium is usually charged as a small percentage of your insured sales (often a fraction of one percent), so cost scales with the volume of receivables you protect and the credit quality of your buyers. Concentrated exposure to weaker or international buyers costs more; a diversified book of financially strong customers costs less. The exact rate requires underwriting. RiskCube compares quotes across multiple carriers to find the most competitive pricing for your receivables profile.
Often placed alongside credit insurance
Protect your receivables before the next big invoice
A single customer's insolvency can erase months of margin. RiskCube places trade credit insurance as part of a complete startup insurance program — so a buyer default doesn't become your problem.
Y Combinator F24 
About the author
Andrei Craciunescu
Founder & CEO, RiskCube · CA License #4467994
LinkedIn ProfileAndrei previously worked in Risk & Analytics at WTW (Willis Towers Watson), one of the world's largest insurance brokers. He holds an M.Sc. in Mathematics from LMU Munich and conducted PhD-level research in financial mathematics at the Technical University of Munich (TUM). His work focuses on translating risk data into actionable insurance coverage decisions for VC-backed startups and small-to-medium businesses across the U.S.