- It’s all in the name. Single contract credit insurance will cover you for the length of one project or contract, protecting your business against unpaid invoices.
- This cover can make your business more resilient and give you the confidence to grow.
- Don’t leave your business exposed to credit risk. Our single contract offering can protect you.
Summary
Key Takeaways
If you work on long-term projects and have lengthy contracts, you’ll know how easy it is for costs to creep up. And, with these costs always comes the risk of your customers not paying on time… or at all. Insuring these contracts could be the solution.
What is single contract credit insurance?
Single contract credit insurance, sometimes known as ‘single project insurance’ or ‘single buyer credit insurance, is a form of trade credit insurance. It covers the length of a single contract and the potential risk associated with the project.
It’s designed to protect a business from non-payment of invoices due to insolvency or protracted default, and the effects of this.
With a fixed level of cover throughout the policy period, single contract insurance can also help with work-in-progress costs for a number of months. This is non-cancellable and therefore provides businesses with consistent security.
How does single contract insurance work?
Single credit insurance is taken out before the start of a contract and, under the terms of the policy, is only activated if a customer becomes insolvent or defaults on their payments.
You can choose the coverage duration and limit to tailor the policy to the individual contract and your business needs.
If a claim is made, you could receive compensation for the covered losses to protect your cash flow.
What are the benefits of single contract insurance?
It’ll make your business resilient
A single insurance policy will enhance the contract security and ensure operational continuity if your customer defaults on payment.
It helps you to offer credit terms with confidence
We cover losses if insured payment defaults occur, and process claims based on policy terms.
It only covers you for what you need
A single credit policy is bespoke to your contract needs, meaning you can customise its length and cover amount. There is no long-term commitment and this reduces wasted spend.
Its premiums decrease as the exposure decreases
The premiums for our single contract policies are amortised on a pro-rata basis. So, you’ll only pay for the cover you need.
Its cost can be incorporated into your customer’s contract
If you plan ahead, additional financial flexibility can be gained by working the policy fees into your customer's contract.
It’s based on data
At Allianz Trade, we utilise the best data in the market for underwriting decisions, ensuring accurate and reliable coverage for clients.
Here’s an example of a real business scenario using single contract cover
A manufacturer of automotive parts secures a £2,000,000 two-year contract with an overseas distributor, with payment terms of 40% upfront and 60% phased over three years.
Risk: Potential payment default or delays due to international factors.
Solution: The part manufacturer purchases Medium Term Credit Insurance covering 90% of the contract value, including Political Risk cover.
Outcome: Insurance protects against default, ensuring the manufacturer's cash flow remains stable and operational disruptions are minimised, enhancing financial resilience in their international trade.
Risk: Potential payment default or delays due to international factors.
Solution: The part manufacturer purchases Medium Term Credit Insurance covering 90% of the contract value, including Political Risk cover.
Outcome: Insurance protects against default, ensuring the manufacturer's cash flow remains stable and operational disruptions are minimised, enhancing financial resilience in their international trade.
What’s the difference between single risk and single contract insurance?
At Allianz Trade, we offer single contract cover. While similar, this is different to single risk credit insurance.
The core differences are:
Length of contract
Single risk cover typically lasts up to 12 months, but single contract insurance can cover you for up to 36 months.
Cancellation policy
The credit limit (amount of cover provided) under a single contract cover is non-cancellable, for the duration of the policy period. This differs from single risk. Whilst a credit limit can be non-cancellable for the max policy duration of 12 months, by agreement, a limit can also be cancelled, withdrawn or reduced, if that prior agreement is not in place.
Business type
Single contract policies cover one contract only. Single risk can cover a contract or repeat business – the amount of cover is specified by a credit limit that’s set by the insurer who continuously monitors the customer’s financial situation.
Try single contract credit insurance from Allianz Trade
If you’re looking for a bespoke policy, separate from any other credit insurance policy, we can help.
You can protect your profits under one contract against non-payment, work-in-progress costs, and inability to supply the contracted goods or services.
It’s designed to insure a specific contract, and the policy can be tailored to the terms of your contract and to all tendering requirements.
Key features of our single contract credit insurance include:
- Non-cancellable credit limits
- Any contract length up to 36 months
- Up to 90% of the loss is paid out in the event of a claim
- AA rated worldwide cover
- Any contract value
- Cover in place before the contract starts
Are you eligible for Allianz Trade single contract credit insurance?
Don’t leave your business exposed to credit risk. Our policies are pretty inclusive. They’re available to:
- Most sectors
- Public or private buyers
- Any outstanding balance – no minimum or maximum value
You may be interested in single project contract works insurance if you:
- Manufacture customised products
- Are considering exporting outside of your usual area
- Are at a turning point in your business or want to grow
- Want to take on a new contract outside your typical scope of work
- Need to finance a large project, but won’t be paid for a while
Apply for cover from Allianz Trade
Single contract credit insurance is quick and easy to set up, and virtually admin-free. Before you enter into a contract with a customer, apply with us.
Following acceptance, you can close the deal and you’ll be insured against long-term non-payment, insolvency, and political risk.
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Our expertise and commitment
Allianz Trade is the global leader in trade credit insurance and credit management, offering tailored solutions to mitigate the risks associated with bad debt, thereby ensuring the financial stability of businesses. Our products and services help companies with risk management, cash flow management, accounts receivables protection, Surety bonds, Business Fraud Insurance, debt collection processes and e-commerce credit insurance ensuring the financial resilience for our client’s businesses. Our expertise in risk mitigation and finance positions us as trusted advisors, enabling businesses aspiring for global success to expand into international markets with confidence.
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