Contracts, Carriers & Cost


Exim Applicants

Accounts Receivable Insurance Contracts

There are a variety of receivable insurance contracts on the market. These contracts are commonly called Inland Marine controlled contracts. What this means is every word of every contract, as well as the premium rates, are filed with the insurance regulatory body in every state. Depending on whether you are looking for domestic coverage (within the United States) or export coverage (virtually anywhere in the world), there are numerous carriers, domestic and abroad, to meet your company' s needs. Each carrier offers many types of contracts. All contracts cover insolvency. Some contracts offer slow pay (protracted default) and political risk coverage.

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Various Structures, Payment Options, and Custom Endorsement

These contracts have various structures, payment options, and custom endorsement to meet your company' s particular needs. Generally, larger companies that have an established credit department with policies, practices, and procedures have more sophisticated needs. We can customize a contract that would complement the existing credit process, by empowering the credit department to make nearly all the credit decisions internally. For smaller companies that would like to have a second opinion or outsource the credit making decision to the carrier, ARI will customize a contract for that need. Since ARI is a broker representing your company' s needs, and is not confined to one carrier, ARI will align your company with the appropriate carrier at the best cost.


ARI brokers with all major carriers. Contact ARI to request literature on carriers and to discuss the best approach for your company.


Receivable insurance carriers have different ways to compute premium rates. The two most common rates are coverage approved or annual sales. Many factors go into determining the net annualized premium rate: policy face, industry risk, deductible, co-insurance, and policy features. Generally speaking, premium is calculated at a rate between $.10 and $.20 per $100 of domestic insured sales. Export insured sales are calculated at rate between $.30 and $.50 per $100 of sales. Of course, concentrations in either high risk countries or high risk debtors can cause these rates to change.

Larger companies can expect to pay lower rates per $100 of sales than smaller companies. These rates, as outlined, are merely representative and not firm. Example: $50 million U.S. sales x $.20 (per $100 of sales) = $100,000 premium.

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