GLOSSARY

• CREDIT LIMIT
The value of the requested limit should correspond to the maximum possible amount that the customer may owe the insured under the given commercial conditions and at any given moment. If the credit limit is exceeded (including situations where the insurer refuses to accept the requested risk and reduces the limit, say), the excess risk is not insured and is thus borne by the insured. For the insured, this is a signal that it should consider changing its terms of payment.

One significant aspect of the insurance company’s services is forming a qualified evaluation of the credit risk and defining corresponding credit limits or giving other recommendations for the client. This makes it possible to prevent losses if there is a risk of a buyer becoming insolvent.

As soon as a buyer defaults or becomes insolvent, an insurance investigation is launched. At the end of this investigation – if the terms laid down by the insurance contract are satisfied – the insurance company pays the insured supplier indemnification minus the insured’s percentage co-participation.

• TOTAL INSURABLE TURNOVER
Total insurable turnover equals total turnover for the past calendar year minus uninsurable transactions such as cash payments, in-group contracts and supplies to uninsurable entities i.e. non-entrepreneurial natural persons and public sector entities).

• WAITING PERIOD
During this period the debt is being collected. Upon expiry of the waiting period the insurance company indemnifies the uncollected insured debt.