Insurance for non payment from Client/Agency

[timek]

Hi Guys,

Just wondering if there are recommended insurance policy in case the agency or client goes bust? I know PCG offer something similar but that only covers if the agency goes, but wondering if there is a more tailored policy provider that other use....

Thanks

[TheFaQQer]

If you're worried about the client going bust, and you're direct, then factor your invoices.

If you're worried about the client going bust, and you're not direct, make sure you didn't opt out of the agency regulations.

If you're worried about the agency going bust, then make sure you have PCG protection, and hope the debt isn't too big.

[JoJoGabor]

I looked into factoring as I was worried about a direct client going bust, and somebody corrected me on here that factoring does not protect you from such an occurence but just enables you to get most of the money for an invoice sooner.

I think you can get insurance but if the client has a dodgy credit history it will be prohibitively expensive.

I ended up paying going through an agency for said client. It costs them more money but suits them. ALthough agency are now threatening to take me off site due to non payment! However I have a much smalller risk now

[timek]

If you're worried about the client going bust, and you're direct, then factor your invoices.

If you're worried about the client going bust, and you're not direct, make sure you didn't opt out of the agency regulations.

If you're worried about the agency going bust, then make sure you have PCG protection, and hope the debt isn't too big.

Thanks for the note, I want to avoid the factoring option however that is not available as most roles are not direct

client going bust and not direct is the main pot i guess that everyone falls into, however its the opt out again - agencies now a days put contracts in front of you with opt out.... end off so either you negotiate, take it or walk away

PCG was the option but only covers if agency goes bust no client.....

I guess my reason for this insurance is two fold, one to protect in case of agency / client going bust. Secondly the agency being bad and not paying up for what ever reason they can think off, even when Invoice and signed timesheets are submitted.

[TheFaQQer]

I looked into factoring as I was worried about a direct client going bust, and somebody corrected me on here that factoring does not protect you from such an occurence but just enables you to get most of the money for an invoice sooner.

That's not what the British Bankers Association says:

Debt factoring involves selling your invoices to a third party who, as owner of the debt, then collects it direct from the company invoiced. It will usually be clear to your customers that a factoring company is operating on your behalf. They will process the invoices and allow you to draw finance against the money owed to your business. Essentially, these companies provide a debt collection and ledger management service.

Linky

If you don't want to go that route, then the insurance you need is Trade Credit Insurance. That Wikipedia link has a list of insurers who offer the service, although I'm sure it's not definitive.

[TheFaQQer]

client going bust and not direct is the main pot i guess that everyone falls into, however its the opt out again - agencies now a days put contracts in front of you with opt out.... end off so either you negotiate, take it or walk away

Yes - you negotiate.

Or you understand that you have to have opted out, in writing, before being introduced to the client - so if it's something which is included in the contract, you will already have been introduced so can't opt out.

I've never opted out of the agency regulations.

[timek]

Right so to the question at hand - bar the opt out, are there recommended insurance providers who cover against non payment of invoice?

[BolshieBastard]

If you're worried about client and \ or agent going bust, always insist on weekly billing and payment terms. If they wont agree, walk away.

[Safe Collections]

If you don't want to go that route, then the insurance you need is Trade Credit Insurance. That Wikipedia link has a list of insurers who offer the service, although I'm sure it's not definitive.

Most factoring companies offer insurance as an added extra, it is generally not included in invoice factoring. Similarly many factoring companies do not offer any kind of collection or ledger management services as standard. Often If the factor doesn't get paid for an invoice they have already paid out on, they simply reduce next months payment by the same amount and give the "debt" back to you!

Right so to the question at hand - bar the opt out, are there recommended insurance providers who cover against non payment of invoice?

We can recommend a potential supplier if you PM us, but credit insurance is not a magic bullet. Generally they will only provide insurance on invoices to stable businesses with proven financial history.

If you have a potential contract from a one man band agency operating via a relatively new Ltd company, forget it. They are extremely unlikely to offer insurance in that instance.

The best way to ensure you don't get caught out is to thoroughly vet potential clients before agreeing any credit and to continue monitoring them throughout. If in any doubt do as Bolshie suggests, negotiate shorter payment terms and stick to them.