Credit Insurance - alternatives to traditional whole turnover:

For companies with a turnover above £5m (€3.8m) who require a flexible approach to credit insurance, Rycroft can arrange a Datum Line* credit insurance policy that allows you (the policyholder) greater control of the level of risk you wish the insurer to take on.

Again, the policy is based on risk share, so the more risk you retain as a policyholder the better the premiums. Datum Line policies are not new, however, this policy allows the holder to set the perimeters of the policy, meaning that you set the levels of cover you are comfortable with and can budget for, leaving the real and any unforeseen risk that could harm your company for the insurer.

The real benefit here is that you get to keep more of the premiums that would normally be allocated to a whole turnover policy, meaning that you can quickly build up a better bad debt reserve whilst trading in the knowledge that your company has minimised the risk associated with bad debts.

The difference with this policy over others available is that the Datum line let's say £15,000 is a speculative figure, so if you have an account who you think will exceed this level, then you can apply for cover in anticipation. If the buyer subsequently goes under leaving a debt of only £10,000 (so below the Datum line) then this makes no difference, you are still covered, the only qualifyer (other than the standard terms and conditions of the policy) is that it exceeds the agreed threshold (first loss). This way you know that, as long as you have a credit limit, you are covered on this account.

*Datum Line definition - a fixed line or point of reference. It should be noted that on this policy the Datum line does not act as a threshold or policy excess, unlike some other Datum line policies which stipulate that the account must trade over the Datum Line in order for it to qualify for cover.