Australia
Australia
Austria
Belgium
Bulgaria
Canada
China
Czech Republic
Denmark
Finland
France
Germany
Greece
Group
Hong Kong SAR
Hungary
India
Ireland
Italy
Japan
Lithuania
Mexico
Netherlands
New Zealand
Norway
Poland
Romania
Singapore
Slovakia
Slovenia
Sweden
Switzerland
Turkey
United Kingdom
United States
Australian SMEs and exporters face mounting strain from recent tariff shocks, such as sudden hikes in import and export duties, which disrupt cash flow, stretch credit terms, and raise the risk of non‑payment. Business-to-business invoice defaults have surged by 47 per cent in the past year, signalling rising bad debts and weakened financial health across the country.
At the same time, business insolvencies hit a new high in FY 2025, with 14,105 companies entering insolvency. These trends underline urgent risk management and credit management challenges for firms. Against this backdrop, trade credit insurance offers a strategic solution—credit insurance protects against unpaid invoices, shields accounts receivable, and helps protect your business from tariff-driven defaults.
Tariff shocks occur when import or export duties increase without warning. They can result from trade disputes, political decisions, or changes to trade agreements. These changes can shift profit margins overnight and create uncertainty in future deals.
When costs rise sharply, customers may ask for extended credit terms to manage their cash flow. Others may reduce their orders or delay payment. This creates immediate pressure on suppliers who rely on timely payments to cover operating expenses. Over time, it increases the risk of non-payment and bad debts.
Exporters face extra challenges. Deliveries take longer, which means a longer wait before invoices are due. If a buyer’s financial health declines during that time, the seller carries more risk. Recovering unpaid invoices from overseas markets can be expensive and time-consuming, especially where local legal processes are complex.
Without effective credit management, tariff shocks can weaken a business’s credit portfolio. They can reduce working capital and limit access to new markets. This is why many businesses review their risk management plans to include tools such as trade credit insurance. This cover protects accounts receivable and supports confidence in trading relationships.
When tariffs increase, buyers face higher costs for the same goods. This can strain their cash flow and make it harder to pay suppliers on time. Even reliable customers can experience financial pressure that leads to payment delays or non-payment.
For suppliers, this creates gaps in working capital. Funds tied up in unpaid invoices reduce the ability to cover operating costs, pay creditors, or invest in growth. Businesses with a concentrated customer base are even more exposed, as a single missed payment can have a major impact.
Tariffs can also increase the risk of customer insolvency. Companies with low margins or high debt are vulnerable when costs rise suddenly. A buyer that was stable under previous credit terms may now be a high-risk account.
Exporters face added difficulty in collecting overdue accounts from overseas buyers. Legal action in another country can be expensive and slow. Disputes over credit basis, contract terms, or political risks may delay settlement even further.
Many businesses hold policies such as business interruption or marine cargo insurance. These offer protection for physical loss or damage to goods, but they do not cover non-payment or bad debts. If a customer delays payment or becomes insolvent because of tariff-driven costs, these policies will not respond.
This gap leaves accounts receivable exposed. A shipment may arrive in perfect condition, yet the seller may still face unpaid invoices. Even if the cause is linked to political risks, contract repudiation, or a collapse in the buyer’s financial health, standard insurance will not provide payment cover.
For exporters, the problem can be greater. Disputes with overseas customers can be costly to resolve. Legal processes vary by country and often take months. During this time, cash flow suffers and credit limits tighten.
A trade credit insurance policy addresses these gaps. It focuses on the risk of non-payment rather than physical damage. It allows a business to transfer this risk to a trade credit insurer, offering protection for both domestic and export trade. This means the business can protect receivables and maintain confidence in extending credit to customers.
Tariff shocks can turn profitable transactions into costly payment disputes. Trade credit insurance gives businesses a safeguard against these risks by covering receivables when customers fail to pay. It supports both domestic and export trade, helping companies manage credit exposure while keeping trading relationships stable.
Trade credit insurance protects a business by covering losses from customer non-payment. It works by transferring the risk to the insurer, who pays a percentage of the outstanding debt. This applies to domestic and export credit insurance.
The policy can cover the debtors ledger, giving insight through ongoing credit information on existing and potential customers. By insuring receivables, businesses can safeguard cash flow, maintain strong relationships, and access financing from a bank with greater confidence. The benefits extend beyond cover, supporting better credit decisions.
Trade credit insurance protects businesses when tariff shocks lead to customer default or delayed payment. Cover can include losses from non-payment, insolvency, and contract repudiation linked to higher trade costs.
It applies to both domestic and export credit insurance, offering protection when political risks or sudden market changes disrupt agreements. This cover helps maintain cash flow, protect access to new markets, and reduce exposure in high-risk transactions.
Businesses also benefit from services such as ongoing monitoring and credit information, which support better decisions and reduce the chance of bad debts.
A trade credit insurance policy goes beyond covering unpaid invoices. It equips businesses with tools and insights that strengthen credit management and support informed trading decisions. It provides protection and credit information to help companies manage risks and grow in both local and new markets.
Key benefits include:
Building a strong credit risk strategy helps protect accounts receivable and keep cash flow steady, even when tariff shocks and market shifts disrupt trading conditions. The right steps combine protection, monitoring, and proactive management.
Assess your existing insurance to identify gaps. Standard business interruption or cargo policies will not cover non-payment or bad debts. A trade credit insurance policy can fill this gap by protecting both domestic and export receivables.
Work with a trade credit insurer who understands your specific needs in both local and new markets. Beyond providing cover, they can supply credit information, monitor customer financial health, and guide you on setting credit limits.
Use the information and tools from your insurer to improve internal processes. This can include monitoring your debtors' ledger more frequently, reviewing credit terms for high-risk accounts, and diversifying your customer base to reduce concentrated exposure.
Safeguard your cash flow against tariff shocks and non-payment. Speak with Atradius about a trade credit insurance policy that fits your specific needs. Protect your accounts receivable, access expert credit information, and trade with confidence in both domestic and new markets. Contact Atradius today.