Sometimes the best examples of the benefits of Credit Insurance have nothing to do with customers going bust and owing you money.

Consider the owner of a timber yard. Every day he loads up other peoples lorries for them to take his timber away and use it in their construction businesses,  making furniture and joinery work. He probably doesn’t worry too much about when the money for the timber he’s sold is coming in. But, he does worry about the timber yard.

He remembers the fire officer coming round and telling him how to prevent the fires breaking out in the yard. He bought the up to date fire sprinkler system in case a fire started. Why? So he didn’t have to claim on his fire insurance policy.

So he didn’t have the prospect of all that timber going up in smoke then wondering how to sell the biggest pile of charcoal in the UK. He didn’t want a fire and neither did he want the business to have any set backs. He took steps to prevent it happening.

Companies buy fire insurance to protect their assets. In terms of buildings, equipment and stock, their value can be less than the value of the debtors, which can be completely uninsured. That’s right, for many businesses the biggest asset is uninsured.

Now consider this. A customer comes into your factory, warehouse or office. He asks for £10,000 of your product to be loaded onto his lorry and says he will come back at the end of the following month and pay you the money. Off you go, load his lorry, shake hands and look forward to seeing him again next month.

He comes back, pays the money and repeats the transaction. A few months go by and he comes back but this time he says he doesn’t want your product. Instead he wants you to put £10,000 in ten pound notes in a case on his lorry and he will be back as usual next month.

Now what do you do?

There is a line in the film “Wall Street” – “Information is useful but it’s what you do with it that makes it powerful.”

The same is true of Credit Insurance. It can tell you who is creditworthy and who is not. Who is on the up and who is on the down. Who is more likely to pay you on time and who is going to take their time.

So what do you do?

Do business with the good customers and prevent the bad ones even from causing you problems or hope the money you gave them in goods and services doesn’t go up in smoke?

Credit Insurance isn’t just about handing you a cheque when it goes wrong. It’s about helping you get it right in the first place.