Terminology Explained

A selection of terms used by Nimbla or in the insurance industry, and what they mean

Bad debt protection
BDP is provided by a funder who work with an insurer to provide cover for their customers. If you purchase bad debt protection from your funder, then you are joint insured, yet the policy belongs to the funder. This means that if something was to happen to either organisation, the other can make claim.
Can I use Nimbla alongside BDP: Yes, provided you insure invoices that are not already covered by the BDP. Insuring the same invoices twice may invalidate both policies

Gap Fill
Gap filling is when a business has a policy on a certain number of their buyers, yet want to trade with a new buyer that was not previously covered. It can also happens when an insurer decides to stop covering a buyer they previously covered

Can I use Nimbla to Gap Fill: Yes, provided the invoices you are insuring are not covered anywhere else.

Insured Loss
This is the amount that the debtor hasn’t paid you when they become insolvent. For example, if the insured invoice value was £50,000 but the debtor had already settled £10,000 when they became insolvent, we would calculate the claim value as £40,000 (£50,000 – £10,000).

Loss Payee
This is the person or organisation who will receive the claim payment. Invoice insurance is usually requested by organisations that factor or fund invoices, to ensure that they get the money they loaned back.

Maximum Policy Limit
This is the invoice value minus the uninsured percentage of 10%. So for example if an insured invoice value was £50,000, we would pay out £45,000 in the case of a successful claim. So £45,000 is the Maximum Policy Limit in this case.

Protracted Default
The failure by a buyer to pay the contractual debt within a pre-defined period calculated from the due date or extended due date of the debt. This is not covered by Nimbla policies – only insolvency during the course of business is covered.

Uninsured Percentage
The uninsured percentage is 10% of the total sum you insure. This means that if the insured invoice value was £50,000, we would pay out £45,000 (- 10%) in the case of a successful claim. The purpose of the uninsured percentage is to incentivise responsible trading.

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