On 13 July, an article from Holding Redlich in Australia follows a recent court case there in which the court ordered a trade credit insurer to pay out an insurance claim to a financier defrauded by a customer. It explains that trade credit insurance is a product that indemnifies a seller against losses from non-payment of a commercial trade debt. It covers all contracts entered into or goods and services provided on credit terms within the policy period. The insurer agrees to pay a percentage of an outstanding invoice or receivable owed arising from a customer’s insolvency, bankruptcy or “protracted default” (overdue contract payment). It highlights the key takeaways when providing trade finance insurance and considers in detail the case and findings, saying that the claim failed because the insurer could not establish that other laws or principles were applicable to the terms of the insurance policy.
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