Accounts Receivable Insurance
By Trish McCarthy, Senior Account Manager, Impello Global · Last reviewed July 2026
Accounts receivable insurance protects the money your customers owe you. When a business customer fails to pay an invoice — through insolvency, prolonged default, or political events beyond their control — the policy reimburses the loss, turning your largest current asset into a protected one.
If your business sells to other businesses on payment terms, your accounts receivable are often the biggest asset on your balance sheet — and usually the least protected. This guide explains what accounts receivable insurance is, what it covers, how it works, what it costs, and how it relates to trade credit insurance.
What is accounts receivable insurance?
Accounts receivable insurance is a commercial policy that reimburses you when a business customer doesn't pay what they owe. It is the same product as trade credit insurance and credit insurance — the name simply emphasizes the asset being protected: your receivables.
Most business-to-business sales happen on open account: you deliver, you invoice, and the customer pays 30, 60, or 90 days later. Until that invoice clears, you are carrying the risk that it never does. Accounts receivable insurance transfers that risk to an insurer, so a customer's failure to pay becomes a claim rather than a loss.
What it covers — and what it doesn't
Covered: customer insolvency; protracted default (a covered customer simply doesn't pay within the agreed terms); and, when political risk cover is added, non-payment caused by currency controls, expropriation, or political violence.
Not covered: amounts above an approved credit limit; invoices already overdue when the policy incepts; and losses arising from a genuine dispute over the goods or service, which must be resolved first.
How the coverage works
- What you insure. Your whole book of receivables (whole-turnover), your largest accounts, or a single major customer. Broader coverage generally prices better because the risk is spread.
- Credit limits. The insurer sets a credit limit per customer — the maximum insured exposure to that buyer — and monitors each buyer's credit continuously, giving you an expert second opinion on who you extend terms to.
- Premium. A small percentage of insured sales, typically a fraction of one percent (see what it costs).
- Claims. If a covered customer doesn't pay, you file a claim after the waiting period and the insurer pays the indemnity — usually 85% to 95% of the loss.
Accounts receivable insurance vs. trade credit insurance
They are the same coverage under different names. "Accounts receivable insurance" frames the product around the asset protected; "trade credit insurance" frames it around the credit you extend; "export credit insurance" is the same coverage applied to overseas sales. Whichever term you started with, the policy does the same job. For the full mechanics, see our complete guide to trade credit insurance.
Why businesses use it
- Sell on open account with confidence — extend competitive terms to new and larger customers without betting the business on any one of them paying.
- Unlock better financing — insured receivables are stronger collateral. Lenders will often advance more, at better rates, against an insured receivables book, frequently offsetting the premium.
- Get early warning — continuous buyer monitoring flags deterioration before it becomes a bad debt.
- Protect against catastrophic loss — the failure of one major customer can be existential; coverage turns that shock into a claim. This is especially valuable for exporters carrying unfamiliar overseas buyers.
What it costs
Premiums typically range from about 0.05% to 0.6% of insured sales, with most programs near the lower end, depending on your industry, the spread and quality of your customers, and your loss history. See our detailed guide to trade credit insurance cost.
Who provides it, and how to buy
Coverage is written by specialist carriers — Allianz Trade, Coface, Atradius, AIG, Chubb, and others — and placed through a broker, not bought off a shelf. Because appetite varies widely by industry, geography, and buyer profile, an independent broker that places across the whole market gets you the best terms. See our comparison of trade credit insurance carriers.
Related coverage: Trade credit insurance: complete guide · Political risk insurance · Ex-Im Bank & export credit insurance
Frequently asked questions
What is accounts receivable insurance? A policy that reimburses you when a business customer fails to pay an invoice, protecting the receivables on your balance sheet against non-payment.
Is accounts receivable insurance the same as trade credit insurance? Yes — they are the same product. "Accounts receivable insurance" emphasizes the asset protected; "trade credit insurance" and "credit insurance" are the same coverage.
What does it cover? Non-payment due to customer insolvency and protracted default, plus political risks such as currency inconvertibility and expropriation when that cover is added. It does not cover disputed invoices or exposure above an approved limit.
How much does accounts receivable insurance cost? Typically 0.05%–0.6% of insured sales, with most programs near the lower end, based on industry, customer mix, and loss history.
Who provides accounts receivable insurance? Specialist carriers such as Allianz Trade, Coface, Atradius, AIG, and Chubb, placed through a broker who matches your receivables to the right market.
Who needs it? Any business selling to other businesses on payment terms that would feel the loss if a major customer didn't pay — exporters, manufacturers, distributors, and wholesalers in particular.
Talk to Impello
If accounts receivable represent a major part of your balance sheet, insuring them is often the highest-leverage protection available — and it can pay for itself in better financing terms. Impello is an independent specialty brokerage and Ex-Im Bank Platinum Broker. Schedule a consultation.