Trade Credit Insurance Calculator
Customer non-payment insurance.
Calculate trade credit insurance annual premium from credit sales, premium rate, deductible, and max claim. Free educational tool.
What this tool does
This calculator models trade credit insurance by computing your annual premium and the corresponding coverage limit based on your credit sales exposure. The annual premium is calculated by applying your chosen premium rate to total credit sales, while the maximum claim amount is derived from your sales volume and selected coverage percentage. The deductible represents the portion of any loss you would bear before coverage applies. The result illustrates how these four inputs—annual credit sales, premium rate, deductible percentage, and maximum coverage percentage—interact to shape both your insurance cost and protection level. This calculation assumes a straightforward linear relationship and does not account for claims history, industry risk adjustments, or policy exclusions that may apply in practice. The output is for educational illustration of how premium and coverage limits are structured.
Quick answer: with the default values, the result is $30,000.00 (Annual Premium). Adjust the values below for your own figures.
Enter Values
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Formula Used
Disclaimer
Results are estimates for educational purposes only. They do not constitute financial advice. Consult a qualified professional before making financial decisions.
Trade credit insurance covers domestic and export sales against customer non-payment. Premium typically 0.2-0.5% of insured turnover. Coverage: 80-90% of invoice value (10-20% deductible to maintain seller incentive to manage credit). Supplements credit checking with risk transfer.
10M annual credit sales × 0.3% premium = 30,000 annual cost. Maximum claimable per claim: 90% × 10M = 9M total cap. Deductible: 10% means seller bears first 1M of cumulative losses. Effectively eliminates concentration risk if one large customer fails.
Trade credit insurance value increases with: customer concentration (top 5 customers = 50%+ of revenue), export exposure (foreign customers harder to collect from), thin profit margins (single bad debt could wipe out months of profit), bank requirements (lenders often require TCI on receivables-backed lending). Below ~2M turnover, TCI rarely cost-effective.
A worked example
With the defaults: annual credit sales of 10,000,000, premium rate of 0.3%, deductible of 10%, max coverage of 90%. The tool returns 30,000.00.
What moves the number most
The result responds to Annual Credit Sales, Premium Rate %, Deductible %, and Max Coverage %.
The formula behind this
Premium = credit sales × rate. Max claim = sales × coverage %. Deductible = sales × deductible %.
£10,000,000 × 0.3% premium with 90% coverage = $30,000.00.
Inputs
| Max Claimable | $9,000,000.00 |
|---|---|
| Deductible | $1,000,000.00 |
| Premium % of Sales | 0.30% |
| Coverage Ratio | 90.00% |
This example uses typical values for illustration. Adjust the inputs above to match a specific situation and see how the result changes.
Sources & Methodology
Methodology
The calculator computes the annual insurance premium by multiplying your annual credit sales by the premium rate expressed as a decimal. It then calculates two related figures: the maximum claim amount, determined by applying the maximum coverage percentage to annual sales; and the deductible amount, derived by applying the deductible percentage to annual sales. The model treats the premium rate, coverage limit, and deductible as fixed percentages that remain constant throughout the period. It does not account for claims history, adjustments based on customer creditworthiness, policy conditions, exclusions, or variations in the rate structure. Results reflect the mathematical relationship between inputs and do not predict actual claims or losses.
References
Frequently Asked Questions
When is TCI worth it?
How does claim process work?
Excludes anything?
Atradius vs Coface vs Allianz Trade?
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