Credit insurance for lease agreements

This extended coverage duration ensures sustained stability and confidence in leasing agreements, offering businesses comprehensive security over a multi-year timeframe.

Machinery leasing contract

A small manufacturer of specialist machinery leases £500,000 worth of equipment to a local contractor, with monthly payments of £8,000 over five years.

Risk: Potential payment default due to changes in the contractor’s financial instability.

Solution: The manufacturer purchases credit insurance covering 90% of the lease value.

Outcome: The policy protects against default, ensuring the manufacturer’s cash flow remains stable and operational disruptions are minimised, enhancing financial resilience in their leasing operations. The manufacturer is also able to gain possession of the specialist machinery and lease them elsewhere.

High-value server leasing

An IT infrastructure services company leases high-value servers to a client, with £20,000 monthly lease instalments over a three-year period.

Risk: Potential payment default due to market volatility affecting the client's financial stability.s.

Solution: The leasing company purchases credit insurance covering 90% of the lease value.

Outcome: Despite the client experiencing a temporary financial setback, the policy enables the leasing company to recover 90% of the outstanding payments, ensuring minimal disruption to their cash flow. The lease contract included an Acceleration Clause, allowing the IT company to demand immediate repayment of the remainder of the lease when the client defaulted on one payment, which was also then covered by the policy.