Indian insurer HDFC ERGO has announced the launch of a new trade credit insurance product.
The product, launched last week, will cover businesses against the commercial risks of their buyer’s defaults. Causes of loss covered by the policy will include insolvency and default.
With globalisation increasing and the global economy still painting an unclear picture, the product will be available to all Indian companies regardless of size, the third largest non-life insurer in India confirmed.
“No industry or company is immune from trade credit risk and the failure of a buyer to pay for the goods or services purchased can have a catastrophic impact on the viability of a supplier,” Anuj Tyagi - executive director of HDFC ERGO General Insurance Company said on the launch of the product.
“Trade credit insurance will provide a safety net for suppliers to do business with peace of mind.”
The protracted default coverage will allow a business to claim when a buyer fails to pay the receivable within a pre-defined period from the due date of payment.
Currently six Indian insurers, including state-owned firms New India and United, offer similar products and Mukesh Kumar, executive director of HDFC ERGO, told India Today
that the firm hopes to sell 100 policies in the next 18 months.
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