Trade Credit Insurance Premium Calculator
Estimate what a trade credit insurance policy might cost you each year, how much of an expected bad debt it would pay back, and the loss rate at which the cover starts to pay for itself.
Indicative range 0.1% to 0.5%. Your real rate depends on buyer risk, sector, payment terms, country mix and loss history.
An estimate, not a quote. Your inputs stay in your browser.
How to calculate a trade credit insurance premium
Most whole-turnover policies charge a rate on the sales you insure. The premium is only half the picture, so we also work out what the policy would pay on a normal year's bad debt after the first loss and indemnity, and compare the two.
The credit sales the policy covers, usually all domestic and export sales on credit terms. Take it from your sales ledger, net of cash and advance-paid sales.
Example: ₹500 Cr a yearThe percentage the insurer charges on insured sales. It comes from the insurer or broker proposal and moves with your buyers' risk and your claims history.
Example: 0.25% gives ₹1.25 Cr before GSTNon-life insurance premiums in India attract 18% GST. Businesses can usually claim it back as input tax credit, so check with your tax team.
Example: ₹1.25 Cr × 18% = ₹22.5 LThe total bad debt you absorb each year before the insurer pays anything. It is written in the policy schedule.
Example: first ₹50 L of losses are yoursThe share of each approved claim the insurer pays, commonly 85% to 95%. The rest stays with you so you keep an interest in credit control.
Example: 90% of a ₹2 Cr claim = ₹1.8 CrWrite-offs as a share of credit sales over the last three to five years. Take it from the bad debt expense account and the allowance movement.
Example: ₹1.5 Cr on ₹500 Cr = 0.3%| Premium (0.25% of ₹500 Cr) | ₹1.25 Cr |
| GST at 18% | ₹22.50 L |
| Expected bad debt (0.3%) | ₹1.50 Cr |
| Claim paid ((₹1.5 Cr − ₹50 L) × 90%) | ₹90.00 L |
| Loss you still carry | ₹60.00 L |
| Total cost with cover | ₹2.08 Cr |
- Premium with GST: ₹1.25 Cr + ₹22.5 L = ₹1.48 Cr
- Claim paid: (₹1.5 Cr − ₹50 L) × 90% = ₹90 L, well under the 30× cap
- Normal year: ₹1.48 Cr + ₹60 L retained = ₹2.08 Cr with cover, against ₹1.5 Cr self-insured, so cover costs ₹57.5 L net
- Bad year at 3×: ₹4.5 Cr loss, ₹3.6 Cr claim, ₹2.38 Cr with cover against ₹4.5 Cr. Break-even loss rate: (₹1.48 Cr ÷ 90% + ₹50 L) ÷ ₹500 Cr = 0.43%
Indicative trade credit insurance rates and policy terms
Insurers do not publish rate cards. Allianz Trade says most premiums come in below 0.5% of turnover, and Atradius describes the cost as a percentage of turnover combined with the level of risk. The ranges below are indicative only, so treat them as a starting point for a broker conversation.
| Term | Indicative range | What it depends on |
|---|---|---|
| Premium rate, whole turnover | 0.1% to 0.5% | Buyer credit quality, sector, payment terms, export share and your claims history |
| Higher-risk sectors or countries | 0.5% and above | Construction, commodities, long terms and buyers in high-risk markets cost more |
| Indemnity | 85% to 95% | Higher cover usually means a higher rate; political risk is often 90% to 95% |
| Aggregate first loss or deductible | Set per policy | A higher first loss lowers the premium but you absorb more small losses |
| Maximum liability | 20 to 40 times premium | Caps total claims in a policy year; check it covers a bad year |
| Credit limit fees | Flat fee per buyer | Charged by some insurers for each limit requested or monitored |
Sources: Allianz Trade and Atradius public guides on trade credit insurance cost; ICISA explainer. All figures are indicative and are not a quote. Only an insurer or licensed broker can price your policy.
Get a one-page report with your premium, claim paid, retained loss, break-even loss rate and a bad-year view.
How to lower the cost of credit insurance
The premium follows the risk the insurer sees. The cleaner your receivables data, the better the terms you can negotiate.
Bring three to five years of write-offs, ageing and DSO. A steady, low loss record is the strongest lever on the rate.
If small defaults would not hurt you, a higher aggregate first loss can cut the premium noticeably. Run both options in the calculator.
Insurers cover buyers up to the limit they approve. Work out what you need first with the credit limit calculator, then request limits that match.
Excluding government buyers, group companies or cash-in-advance customers shrinks insured sales and the premium with it.
Policies have strict deadlines for notifying overdue accounts. Miss one and a valid claim can be refused.
Sales above an approved limit are not covered. Watching exposure against limit in your receivables data each week stops silent gaps in cover.
Frequently asked questions
Most whole-turnover policies charge a percentage of the credit sales you insure. The insurer sets the rate from your buyers' credit quality, sector, payment terms, export countries and your claims history. Some insurers also charge a fee for each credit limit they approve.
Allianz Trade says premiums are usually below 0.5% of turnover, and many policies land between 0.1% and 0.5%. That range is indicative. Only an insurer or broker can quote your actual rate.
Yes. Non-life insurance services, including trade credit insurance, attract 18% GST. A registered business can usually claim it as input tax credit because the cover is used for its taxable supplies, so the real cost is often the premium before GST.
It is the total bad debt you agree to carry each policy year before the insurer pays any claim. A higher first loss lowers the premium but leaves more small defaults with you.
The insurer pays 90% of each approved loss and you carry the other 10%. Insurers keep this share with you so you stay careful about who you sell to on credit.
In a normal year the premium may cost more than the claims it pays. The value shows up in a bad year, when one large customer fails, and in better bank financing against insured receivables. Compare your break-even loss rate with your worst year, not only your average.
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