Credit Insurance doesn't get enough credit - Chalasinski Insurance Group, Ohio

Credit Insurance doesn’t get enough credit

Credit insurance can often be a confusing topic. Many people do not realize that there are two types of credit insurances, one that pertains to personal insurance, and one that pertains to commercial insurance.

Personal vs. Commercial Insurance

Let us first establish the basics. Personal insurance is insurance purchased to meet individual or family needs. Commercial insurance is insurance intended for business firms, governmental units, and non-profit organizations.

The two types of credit insurances are payment protection insurance and trade credit insurance.

Payment Protection Insurance

Payment protection insurance (PPI), also known as credit protection insurance or loan repayment insurance, refers to personal insurance. This insurance product enables consumers to insure repayment of loans if the borrower faces any circumstances that may prevent them from earning income to service the debt. Examples of such circumstances are death, illness, and losing a job.

Trade Credit Insurance

Trade credit insurance, also known as business credit insurance and export credit insurance, refers to commercial insurance. It is an insurance policy and risk-management product offered by insurance companies and government agencies to businesses wishing to protect their accounts from loss due to credit risks. Examples of such risks are protracted default, insolvency, or bankruptcy.