The policy specifically states what is covered and uncovered and buyers will not pay after bankruptcy or insolvency. Payments can further be delayed by bankruptcy as well. Both instances are covered under a trade credit insurance policy. If a buyer does not pay, the trade credit insurance policy will pay out a percentage of the outstanding debt. This percentage usually ranges from 75% to 95% of the invoice amount, but may be higher or lower depending on the type of coverage stated or negotiated.
Tin addition there is flexibility allowing the policyholder to cover the entire portfolio or just the key accounts against corporate insolvency, bankruptcy and bad debts. The most common type of cover is so-called Whole Turnover Cover, which covers all buyers of the policyholder.