Trade credit insurance in Germany
DigiCare Insurance is an independent, BaFin-regulated broker that arranges trade credit insurance (Warenkreditversicherung) for international businesses, exporters, and Mittelstand firms operating in Germany. We work in English from first quote to claim.
Trade credit insurance protects a business against the risk of non-payment, when a commercial customer fails to pay an invoice through insolvency or protracted default. It insures your accounts receivable, the money buyers owe you. In Germany it is known as Warenkreditversicherung, and it is a business-to-business cover.
Do not confuse it with consumer "credit insurance" or payment-protection insurance (Restschuldversicherung), which insures a borrower's own loan repayments. That is a separate B2C product under §7a of the German Insurance Contract Act (Versicherungsvertragsgesetz, VVG). Trade credit insurance does the opposite: it insures the seller's receivables, not the buyer's debt. The federal administration's own definition frames it as cover against not being paid under a contract. If a buyer goes insolvent or simply stops paying, the policy pays the insured share of the loss, so a single bad debt does not sink your cash flow.
What does trade credit insurance cover, and what is excluded?
A policy covers two insured events. The first is customer insolvency (Kundeninsolvenz), where a buyer formally cannot pay. The second is protracted default (Zahlungsverzögerung), where a buyer simply does not pay within an agreed period even without formal insolvency. Cover usually applies to both domestic and international receivables. Most policies insure commercial risk; exporters can add political risk, which matters when selling into markets where payment can be blocked by events outside a buyer's control. One point trips up many buyers: the policy does not pay 100%. The indemnity ratio is typically 60-90%, carrier-dependent, and you carry the rest as a self-retention (Selbstbehalt). This keeps your own credit management honest. Cover is voluntary; no German statute requires it.
| Typically covered | Typically not covered |
|---|---|
| Customer insolvency (Kundeninsolvenz) | Disputed or contested invoices |
| Protracted default (non-payment without insolvency) | Debt already overdue before cover started |
| Commercial risk on B2B receivables | The amount above your granted credit limit |
| Political risk on exports (optional add-on) | Intra-group sales between your own companies |
| Domestic and international invoices | Political risk when no add-on is in place |
Why do businesses in Germany buy trade credit insurance?
Germany is an export-heavy economy built on its Mittelstand, and most B2B sales run on open payment terms. That makes a single large default a real threat. Four reasons businesses insure their receivables
Protect cash flow and working capital
One insolvent buyer can wipe out a quarter's margin. Insured receivables (Forderungen) mean a default becomes a claim, not a crisis for your liquidity (Liquidität).
Unlock better bank financing
Insured receivables are stronger collateral. Lenders often advance more, and on better terms, against a book that is insured against non-payment. Some lenders even require cover as a condition.
Grow safely into new and foreign markets
Your insurer continuously checks the creditworthiness of buyers you do not know yet. You trade on the strength of that buyer data instead of guessing.
Offer competitive payment terms safely
You can win deals by extending credit to customers, while the insurer absorbs most of the downside if a buyer fails.
For exporters and international firms it comes down to one thing: you keep selling on credit, and the insurer carries the part of the risk you cannot afford to.
How much does trade credit insurance cost?
There is no fixed tariff. In 2026, a trade credit premium is charged as a small percentage of your insured turnover, individually underwritten and quote-only. No carrier publishes a standard rate, because the price depends on your specific book of buyers. What moves the number up or down is consistent across the market.
Sector and buyer mix
Higher-risk industries and a concentrated set of large buyers raise the premium; a broad, stable buyer spread lowers it.
Country risk
Selling into volatile export markets costs more than insuring domestic German receivables.
Loss history
A clean record of paid invoices is rewarded; past write-offs are priced in.
Payment terms and self-retention
Longer terms and a lower self-retention (Selbstbehalt) raise the premium; carrying more of the risk yourself lowers it.
For contrast, the public federal Hermes export scheme uses a fixed self-retention of 5% on political risk and 15% on commercial risk. That is the state scheme, not a private-market premium, and it is not the price you pay for private cover. Your private premium is set by underwriting, so the only accurate figure is a quote on your actual turnover and buyers.
How to get cover, and how a claim works
Setting up trade credit insurance takes a handful of steps, and a claim runs through the same five stages every time.
- 1
Share your buyer portfolio and the limits you want
You tell us who your commercial customers are and the level of receivables you need insured.
- 2
The insurer runs creditworthiness checks (Bonitätsprüfung)
It assesses each buyer and sets a per-buyer credit limit (Kreditlimit), the ceiling up to which that customer's invoices are insured.
- 3
Choose your policy structure
A whole-turnover policy insures your entire book; single-buyer or multi-buyer cover targets specific large customers. We match the structure to how you actually sell.
- 4
Trade and monitor
You invoice as normal. The insurer monitors your buyers and adjusts limits as their financial position changes.
- 5
If a buyer defaults, you notify and claim
The insurer or its debt collection (Inkasso) partner pursues the unpaid invoice. Once the process concludes, the policy pays your insured share, typically 60-90% of the net receivable.
Private trade credit insurance vs. the public Hermes export guarantee
International finance teams often confuse two different things. Private trade credit insurance covers everyday domestic and international B2B receivables on the open market. The federal Hermes export credit guarantee (Hermesdeckung) is a state-backed instrument that supplements the cover available from private-sector credit insurers, mainly for exports to emerging and developing markets where private insurers will not fully carry the risk. One source of confusion is the name: Euler Hermes AG is the operator that runs the federal scheme for the German government, while the same historic name has also appeared on private-market credit insurers. They are not the same thing, and the public scheme's self-retention is not a private premium.
| Private trade credit insurance | Public Hermes export guarantee | |
|---|---|---|
| Who provides it | Private insurers, BaFin-regulated | Federal government, run by Euler Hermes AG |
| What it covers | Everyday domestic and international B2B receivables | Mainly emerging-market export risk private insurers won't take |
| Role | Your core, day-to-day cover | Supplements private cover where the market won't go |
| Self-retention | Set by underwriting (typically ~10-40%, carrier-dependent) | 5% political / 15% commercial (public scheme figure) |
| Legal form | Insurance contract under the VVG | Ausfuhrgarantie / Ausfuhrbürgschaft (state guarantee) |
Why use an independent broker for trade credit insurance in Germany?
Germany's trade credit market is concentrated among a handful of carriers, and each has a different appetite, different country and buyer limits, and different indemnity terms. An independent, BaFin-regulated broker (Versicherungsmakler) compares those carriers for you and structures the programme around your buyers, rather than selling one insurer's product like a tied agent (Vertreter). German buyers trust a Makler precisely because the advice is not tied to one carrier. DigiCare is that independent, multi-carrier broker, and we run the whole process in English for international businesses operating in Germany. We also arrange surety bonds and guarantees, a sibling B2B credit-risk product that guarantees performance rather than insuring receivables.
Chapter VI
Frequently asked questions about trade credit insurance
- What is trade credit insurance?
- It protects a business's accounts receivable against a commercial customer failing to pay, through insolvency or protracted default. It is a B2B cover, known in Germany as Warenkreditversicherung, and it insures the seller's invoices rather than a borrower's loan.
- Is trade credit insurance the same as the Hermes export guarantee?
- No. The Hermes export credit guarantee is a federal, state-backed scheme run by Euler Hermes AG that supplements private cover, mainly for emerging-market export risk. Private trade credit insurance covers your everyday domestic and international B2B receivables.
- Does trade credit insurance cover political risk?
- Most policies cover commercial risk as standard, and exporters can add political risk. That add-on matters when selling into markets where payment can be blocked by events outside the buyer's control, not by the buyer itself.
- How much does trade credit insurance cost in Germany?
- It is quote-only, charged as a small percentage of your insured turnover. The price depends on your sector, buyer spread, country risk, and loss history. There is no public standard rate, so you need a quote on your actual book.
- Does it pay 100% of an unpaid invoice?
- No. The indemnity ratio is typically 60-90%, with a self-retention you carry yourself. The exact percentage is carrier-dependent and set in your policy. The retention keeps your own credit management disciplined.
- Is "credit insurance" the same as payment-protection insurance?
- No. Trade credit insurance is B2B and insures a seller's receivables. Payment-protection insurance (German Restschuldversicherung, §7a VVG) is B2C and insures a borrower's own loan repayments. They are opposite products.
- Can an international business in Germany get an English-language policy?
- Yes. DigiCare is an independent, BaFin-regulated broker serving international businesses, exporters, and the Mittelstand in English, from the first quote through to a claim.
- Do I also need surety bond insurance?
- It depends on your business. Trade credit insurance protects your receivables against non-payment (VAG class Nr. 14 Kredit). If your clients instead require security, for performance or warranty obligations, surety bond insurance is the right product (VAG class Nr. 15 Kaution). Many firms use both.