Money owed to a company by its clients is the basic definition of accounts receivable and depending on your business it may total a large sum of money that you have not yet collected. In any matter it is an amount of money that rightful belongs to your company that has not been collected yet. For many small businesses, this sum of money is vital to it’s ability to remain open, and without it would place them in financial hardship.
Often overlooked, but one of the most important types of small business insurance, accounts receivable insurance, covers the costs incurred by reconstructing accounts receivables records that may have been destroyed or damaged as a result of a covered peril, such as a fire or flood. That is, the cost to research and replace the accounts receivable records destroyed by a natural disaster is included in the coverage as is the expense incurred to recover the dollar value of the funds owed by clients and customers.
Small business accounts receivable insurance provides coverage for a number of losses including collection expense beyond normal collection costs, interest charges on loans needed to offset impending collection losses from a covered peril loss or damage, and all sums due from clients and customers resulting from direct loss or damage to accounts receivables records.
Accounts receivable insurance allows a small business owner to limit his risk as well as they out-of-pocket financial expenses required to get back to the business of work after destroyed or damaged accounts receivable records.
