Trade Credit Insurance Calculator
Enter credit sales, bad debt history and the policy terms.
Expected bad debt
β
Enter values above
Premium cost
Recovery from insurer
β
Net cost of cover
β
Benefit of insurance
β
Premium as % of bad debt
β
Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Annual credit sales ($) | 5000000 |
| Bad debt rate (%) | 1.5 |
| Insured cover (%) | 90 |
| Premium rate (% of sales) | 0.4 |
| Deductible per claim ($) | 5000 |
| Expected claims per year | 4 |
| Result | Value |
|---|---|
| Expected bad debt | $75,000 |
| Premium cost | $20,000 |
| Recovery from insurer | $47,500 |
| Net cost of cover | $47,500 |
| Benefit of insurance | $27,500 |
| Premium as % of bad debt | 26.67% |
Values shown are produced by this page in your browser; change any input to update them.
How to use the Trade Credit Insurance Calculator
- Annual credit sales ($) β default 5000000
- Bad debt rate (%) β default 1.5
- Insured cover (%) β default 90
- Premium rate (% of sales) β default 0.4
- Deductible per claim ($) β default 5000
- Expected claims per year β default 4
- Press Calculate to update the results instantly.
Frequently asked questions
When a few large customers represent a big share of revenue and a single failure would threaten the business. For a diversified small-customer base the premium often exceeds the expected recovery.
It is retained by you on each claim, so it matters most when claims are frequent. Some policies also apply an annual aggregate deductible rather than a per-claim one.
Depends on the policy. Most cover protracted default and insolvency; political and currency risks need separate extensions.