Insurance providers understand that businesses may have various risks associated with both their accounts receivable and valuable papers, and therefore offer insurance programs that provide coverage for both types of assets.
Deciding on whether Accounts Receivable and Valuable Papers Insurance is worth purchasing depends on two main factors:
- The specific circumstances and risk exposure of your business
- Business size and complexity
By purchasing a combined insurance policy, you can obtain comprehensive protection for your accounts receivable and valuable papers under a single policy. This can offer convenience, cost savings, and streamlined coverage management.
With Accounts Receivable Coverage, a business can transfer the risk of non-payment to an insurance company. This policy provides financial protection in case the accounts receivable owed to a company become uncollectible due to reasons such as:
- Customer insolvency
- Bankruptcy
- Protracted default
- Political events & economic instability
This coverage can be particularly beneficial for businesses that rely heavily on accounts receivable as a source of cash flow or for those that have large outstanding balances with individual customers.
Valuable Papers Insurance, also known as Valuable Records Insurance or Valuable Documents Insurance, is a part of this policy that safeguards important documents or records owned by a business. These can include legal contracts, financial statements, blueprints, patents, copyrights, stock certificates, customer records, and other critical business documents.
- It covers the cost of recreating or restoring lost or damaged documents.
- It may also provide coverage for the expenses associated with recovering data, such as hiring experts or utilizing specialized equipment or services.