BunkerSEACURE

BunkerSEACURE provides balance sheet protection against the risk of non-payment following the supply of marine fuels to your customers on agreed credit terms.

The Risk

The non-payment for marine fuels supplied on open account credit terms.

The Indemnification

The BunkerSEACURE policy will protect the Insured against the risk of non-payment by their clients for marine fuels. The trigger for non-payment is the event of Insolvency of an insured customer or protracted default. Protracted Default (or slow pay) is usually defined as occurring between 90 and 180 days after the contractual due date for payment.

The Policy

Is designed to provide true balance sheet protection, by effectively substituting an unknown and unbudgeted level of bad debt with a pre-determined and budgeted premium cost, thereby minimising the impact of bad debts on a company's bottom line. In an industry where margins are 'thin', delinquent debts can have a major impact on a company's profitability and cashflow. Furthermore, with rising oil prices, suppliers are continually being faced with extending increased levels of credit to their customers, often at levels beyond which they have hitherto been comfortable taking on their own books. By laying-off this risk to the insurer, suppliers can continue to trade with their customers with confidence and offer extended credit limits and terms of trade in the knowledge that their income stream is secured.

How does it work?

Whatever approach you decide to take, the following general rules apply:

1. You will be given a policy which will provide you with agreed limits of cover for each of your buyers.
2. The Policy limits can be amended either upwards or downwards during the term of the policy and will be set according to the profile of the buyer, his country of operation and general market conditions.
3. Depending on the insurance structure you choose you will be given a set of procedures to follow. It may be better however, to design a structure that allows you to operate as close to your own preferred procedures as possible. Seacurus can tailor the structure to suit your requirements.
4. In the event of a default or concern about a particular buyer, you will be required to contact your insurers to discuss with them the best method of collecting the debt whilst being reassured that (providing there is no dispute over quality for example) the debt will be collected either from the buyer or ultimately, the Insurers.

Financiers are generally very positive about trade credit insurance. By inclusion of the bank as loss payee, policies can be assigned directly to Financiers if necessary. This may assist in gaining the bank’s approval for increased borrowing.