Frequently Asked Questions

How can I get insurance from from you?

The first step is the completion of an application – it is possible to fill-out the application and send online via e-Online, or you can fill-out an insurance contract form. The application/request is not binding, processing is free of charge, and we include a creditworthiness verification of your chosen buyers.

• Is the process of taking out credit insurance complicated?

  Not at all – all products have been designed not to place too much burden on clients. The individual stages of the insurance are very simple:

  • Easy conclusion of the insurance contract – online, via e-mail, over the telephone, or by post.
  • Administration of the insurance policy is not difficult – 90% of the paperwork can be done online.
  • Ease of communication – communication channels through a sales person, risk analyst (underwriter) and claims officer are always open and available to you.
  • Permanent assistance – all KUPEG employees are prepared to help you at any time.

• How quickly are you able to respond to requests?

  We always do our best to respond to the needs of our clients.

  • Arrangement of an insurance contract, if all documents have been made available, may be carried out within 14 days.  The client is then immediately granted access to the online insurance administration application.
  • A credit limit for a buyer is normally issued within two days (in the Czech Republic)
  • An investigation of insurance claims is performed without undue delay and indemnification may be carried out within 45 days from the delivery of the required documents (where insolvency has been proven)

• Is the buyer notified of having been insured by you?

  KUPEG insurance is discreet – it takes place in the background of the relationship between the client and the buyer, and the insurance company does not interfere with that relationship (with the exception of contact with the buyer being agreed in advance with the client or when the buyer has not paid).

• What is the cost of credit insurance?

  The insurance is affordable –

  • The cost is a fraction of a percent of the invoiced amount, whereas the possible indemnity may be as high as the invoiced amount (minus the deductible).
  • Example:
    • Invoice = CZK 100,000
    • Premium = 0.45%
    • Deductible = 20%
    • Premium amount = CZK 450
    • Possible Indemnity = CZK 80,000.

• Can you explain how effective insurance is?

  • If a company’s key buyer goes bankrupt, the insurance company stands behind its client and provides it with indemnity to prevent a loss that could be fatal for the company – the ratio of costs and effect are highly favourable.
  • The following chart simply illustrates the impact of non-payment on an uninsured company and on an insured company.
  • It is clear that insurance can be the difference between your company staying afloat or going out of business.

  Percentage of unpaid receivables	0%	1%	5%	10%
  Turnover in CZK	100,000,000	100,000,000	100,000,000	100,000,000
  Margin in CZK (6%)	6,000,000	6,000,000	6,000,000	6,000,000
  Fixed Costs in CZK	-2,000,000	-2,000,000	-2,000,000	-2,000,000
  Premium in CZK (0,5%)	-500,000	-500,000	-500,000	-500,000
  Write-off of Receivables in CZK	0	-1,000,000	-5,000,000	-10,000,000
  Your Result  without Insurance in CZK	4,000,000	3,000,000	-1,000,000	-6,000,000
  Indemnification in CZK (85%)	0	850,000	4,250,000	8,500,000
  Your Result with Insurance in CZK	3,500,000	3,350,000	2,750,000	2,000,000

  

• Are there other ways in which KUPEG can help me?

  • Financial strategy management – the insurance can be used as a guarantee for a financing institution which provides a loan for funding of receivables.
  • Business strategy management – with the credit limits, it works as a recommendation of the maximum volume of open receivables to be paid by a particular buyer and as a timely warning of problems – the insurance company performs continuous monitoring of the buyer’s financial and payment situation.
  • Debt collection – when handling claims and debt collection, KUPEG effectively and professionally assists the client in the process of judicial and out-of-court recovery of unpaid receivables.

• Can the insurer reduce or cancel a credit limit?

  Yes. The insurer has the right to reduce or cancel a credit limit. The insurer is obligated to immediately notify the policyholder in writing, including the statement of the reason why. The reason for the reduction or cancellation of a credit limit is usually due to information on the worsening of the buyer’s economic situation, deterioration of their payment discipline or the buyer’s insolvency (adjudication of bankruptcy, judicial settlement with creditors, liquidation).

• What should I do if I want to change the amount of a credit limit or to terminate a limit?

  If you are using our online application (e-ONLINE) to access KUPEG’s databases, you can easily use the application to change or terminate your credit limit. If this is not the case, you can change the amount of a credit limit by filling out the >Application for a credit limit< form and enter the newly requested limit amount, or, in order to terminate a credit limit, send a written request containing the number of the Credit Limit Decision and indicate the date as of which you want to terminate the limit.

• What is the term of a credit limit?

  Credit limits are normally defined for an unlimited term.

• How do I correctly set the amount of a credit limit?

  I know the total expected volume of deliveries to be carried out during the term of the contract, the payment term and the distribution of deliveries …more

• How long does it take to process a credit limit decision?

  The processing time, from the time a credit application is submitted up to the time a credit limit decision is issued, depends on several factors: the territory involved; whether or not the relevant party is in the database of KUPEG (or information agencies); and whether or not current agency information is available. If the party has been found in the database and current agency information is available, the usual time of processing does not exceed 2 business days in the Czech Republic.

• What does a credit limit represent?

  The highest value of the sum of anticipated undue receivables from a particular buyer with regard to the applicable payment term and delivery schedule. The credit limit is revolving.

• What does a revolving credit limit mean?

  Throughout the entire term of the credit limit, it is used as the approved amount to repeatedly insure receivables.

• If I send notification of an insurance claim threat after the expiration of the time limit for notification, will entitlement to indemnity be forfeited?

  Yes, it will. The period within which a threat of an insurance claim is to be notified, as described in the insurance contract, is sufficiently long to conduct basic reminder procedures. The longer a receivable has been past due, the lower the chance is to recover it. The insured may attempt to recover the receivable without the insurer’s assistance even after the notification of a threat of an insurance claim  …more

• Does your insurance company assume those receivables for which indemnity has been paid?

  We do not do so in the majority of cases. The collection of receivables is dealt with on a case-by-case basis, using our experience in the proving, claiming and recovery of receivables. The receivables usually remain the property of the insured.

• Does your insurance company assist in the recovery of insured receivables?

  Yes. After reaching an agreement with the insured, KUPEG is actively involved in the debt collection process …more