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Trade credit insurance in Germany: protecting receivables from bad debt
German B2B trade runs on invoices with payment terms, so every delivery is a short loan to your customer. Trade credit insurance, called Warenkreditversicherung in German, pays most of an unpaid invoice when a business customer becomes insolvent or simply does not pay. For international managers the product is familiar in principle; this page explains the German specifics, including clawback risk under German insolvency law.
The question almost everyone asks first
Is trade credit insurance worth it for a German subsidiary or SME?
It is worth it when one customer failing could hurt your results or cash position badly, typically with a few large customers, long payment terms or exports. The policy usually pays 70 to 90 percent of the insured invoice. The insurer's ongoing credit monitoring is often as valuable as the payout, because a reduced limit warns you before a customer collapses. If you mainly sell to consumers or against prepayment, you rarely need it.
Do the maths
How much turnover one bad debt costs
When a customer does not pay, you win the loss back only through new sales, at your margin. The result shocks most owners.
Net margin after tax, rough calculation.
How the German market is organised
Three global specialists, Allianz Trade (formerly Euler Hermes), Atradius and Coface, lead the German market. They operate in Germany as branches of companies based in other EU countries and are therefore supervised in their home states, not by BaFin. Several German composite insurers also write trade credit, mainly for small and mid-sized companies.
If your group already has a global credit insurance programme, check whether the German entity is included and whether limits on German buyers are set locally. Otherwise a German policy may be needed, especially if a German bank finances your receivables.
Credit limits and your duties
You are insured per buyer up to a credit limit the insurer grants after its own assessment. Anything above the limit is your risk. The insurer may reduce or cancel a limit for future deliveries at any time; goods already delivered remain covered.
German policies typically require you to declare all business receivables, not only risky ones, and to report overdue invoices within fixed deadlines. Missing a deadline or extending payment terms without approval can cost you the claim. Assign someone in credit control to own these duties.
Clawback under German insolvency law
A German insolvency administrator can reclaim payments your customer made before insolvency if you knew or should have known about its financial difficulties (sections 129 and following of the Insolvency Code, InsO). Instalment agreements and very late payments are typical warning signs courts look at. Good German policies cover this clawback risk explicitly or as an add-on; it is worth checking because it can hit suppliers who were paid in full.
What is covered
- Unpaid receivables after insolvency of a business customer
- Protracted default without formal insolvency, after a waiting period
- Receivables from goods, works and services to companies
- Export receivables, including political risks if agreed
- Ongoing credit monitoring of your buyers
- Debt collection after a claim
- Insolvency clawback, if included
What is not covered
- Receivables from consumers
- Deliveries above the credit limit
- Disputed invoices until the dispute is resolved
- Transactions with companies in your own group
- Your agreed retention
- Overdue invoices reported too late
Who needs it
- Manufacturers and wholesalers selling on credit terms to businesses
- German subsidiaries of international groups with local customers
- Companies with a few large customers
- Exporters from Germany, including within the EU
- Businesses using factoring or bank financing against receivables
Who can do without
- Businesses selling mainly to consumers or against prepayment
- Companies with many small customers and no concentration risk
Wheel of misfortune
Spin the wheel of bad luck
Six things that really happen. The wheel picks yours and shows who pays.
Cost:
Budget policy
Strong policy
See all six cases
- German customer files for insolvency, all open invoices, often six figures. Budget policy: pays, Strong policy: pays. The standard case. The insurer pays up to the credit limit, minus your retention.
- Customer stops paying, no insolvency, the unpaid invoice. Budget policy: pays, Strong policy: pays. Protracted default is covered once the invoice is overdue by the period set in the policy, even without court proceedings.
- Order shipped above the credit limit, the amount above the limit. Budget policy: does not pay, Strong policy: does not pay. Anything above the approved limit is your own risk, whatever the policy. Ask for a higher limit before a big order.
- Administrator claws back paid invoices, money you already received. Budget policy: does not pay, Strong policy: pays. German insolvency law lets administrators reclaim payments. Only policies with explicit clawback cover pay this.
- Buyer says the goods were faulty, the disputed invoice. Budget policy: does not pay, Strong policy: pays in part. Disputed debts are only paid after the dispute is decided. Strong policies then also cover legal costs of collection.
- Export buyer hit by currency controls, the full export receivable. Budget policy: does not pay, Strong policy: pays. When the buyer pays but the money cannot leave the country, that is a political risk. Only policies with export cover include it.
What it costs
The premium is a rate per mille of insured turnover or outstanding receivables, plus fees for credit checks on your buyers and usually a minimum premium. There are no independent published price comparisons, so we do not quote amounts.
What drives the premium
- Insured turnover and number of buyers
- Your sector and your customers' sectors
- Export share and destination countries
- Payment terms and quality of your credit control
- Bad debts in recent years
- Retention and maximum annual indemnity
The premium is only fixed in the quote, after the insurer has reviewed your turnover structure and buyer list.
The policy levels on the market
02
Whole turnover policy
All business customers covered, individual limits per buyer, per mille premium. The standard for mid-sized firms.
03
Excess of loss and key account cover
For large companies: high annual deductible, cover for selected large buyers, integration with financing.
How to recognise a good policy
| Criterion | Minimum standard | Strong policy | Why it matters |
|---|---|---|---|
| Indemnity percentage | 70 percent | 90 percent | The retention is your loss in every claim. |
| Protracted default | insolvency only | non-payment after a short waiting period | Many debtors never file; they just stop paying. |
| Discretionary limit | limit application for every buyer | small receivables covered without application | Saves administration with many small customers. |
| Clawback cover | excluded | included | German clawback rules can reclaim payments you already received. |
| Reporting deadlines | short and rigid | adequate and extendable | A missed deadline must not cost the whole claim. |
| Policy language | German only | English version available for reference | Credit control teams need to understand their duties. |
Insurers on the German market
Allianz Trade, Atradius and Coface lead the German market but are EU branches not supervised by BaFin, so they do not appear in the list below of insurers under German federal supervision that write this class. This is a market overview, not a statement about who we work with.
| Insurer | Background |
|---|---|
| R+V | insurer of the German cooperative banks, trade credit, surety and fidelity |
| Zurich | credit insurance unit based in Frankfurt |
| VHV | broker-focused insurer in Hanover, products for smaller turnovers and construction |
| Markel | Munich-based specialty insurer, sells through brokers |
| HDI Global | industrial insurer of the Talanx group for larger companies |
From the BaFin register
26
26 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Kredit, allgemeine Zahlungsunfähigkeit)
Show all 26 names from the register
- Allianz Global Corporate & Specialty SE
- Allianz Versicherungs-Aktiengesellschaft
- Baloise Sachversicherung Aktiengesellschaft Deutschland
- Bayerischer Versicherungsverband Versicherungsaktiengesellschaft
- ERGO Reiseversicherung AG
- Generali Deutschland Versicherung AG
- Gothaer Allgemeine Versicherung Aktiengesellschaft
- Great Lakes Insurance SE
- HanseMerkur Reiseversicherung AG
- HDI Global SE
- HDI Global Specialty SE
- HDI Versicherung AG
- Lucura Versicherungs AG
- Mannheimer Versicherung Aktiengesellschaft
- Markel Insurance SE
- Pallas Versicherung Aktiengesellschaft
- ProTect Versicherung AG
- Provinzial Nord Brandkasse Aktiengesellschaft
- Provinzial Versicherung Aktiengesellschaft
- R+V Allgemeine Versicherung Aktiengesellschaft
- RheinLand Versicherungs Aktiengesellschaft
- SIGNAL IDUNA Allgemeine Versicherung Aktiengesellschaft
- SV SparkassenVersicherung Gebäudeversicherung Aktiengesellschaft
- Versicherungskammer Bayern Versicherungsanstalt des öffentlichen Rechts
- VHV Allgemeine Versicherung AG
- Zurich Insurance Europe AG
Source: BaFin company database, retrieved 18 September 2026. Insurers from other EU countries selling through a branch or without a German office are not included.
Legal basis and sources
Products and add-ons
Whole turnover policy
All business receivables declared, limits per buyer. The German standard.
Single buyer cover
Selected key accounts only, higher rate per euro of turnover.
Excess of loss policy
Covers losses above a high self-retention for companies with strong credit control.
Surety bonds
Called Kautionsversicherung: the insurer issues guarantees for advance payments and warranties, freeing bank credit lines.
German federal export credit guarantees
State cover for political and commercial export risks, especially for long terms and difficult markets.
Myth or truth
True or false?
Five things people say about this insurance. Guess first, then see the answer.
In Germany, retention of title fully protects you if the customer goes bust.
This is false.
Only partly. It lets you reclaim goods that are still there and unchanged. Once they are processed, installed or resold, the protection is usually gone.
German federal and state authorities cannot go insolvent.
This is true.
True. The Insolvency Code excludes the federal government and the states, so many policies do not insure receivables from public bodies at all.
German business insolvencies rose in both 2023 and 2024.
This is true.
Yes. According to the Federal Statistical Office, filed business insolvencies increased significantly in both years. That is one reason credit insurers have become stricter with limits.
A credit limit request can tell you whether a new customer is safe.
This is true.
Often, yes. If the insurer refuses or grants only a small limit, it has usually seen weak figures or late payments. Many exporters check new buyers this way before the first delivery.
You can usually insure just the one customer you are worried about.
This is false.
Not usually. German insurers expect you to include your whole business turnover so that they do not only get the bad risks. Single-buyer cover exists but is rare and priced accordingly.
Common mistakes
- Continuing to deliver after a limit was cut, as if nothing had happened
- Reporting overdue invoices late to avoid upsetting a customer
- Assuming a group policy covers the German entity without checking
- Agreeing instalments with a struggling customer without thinking about clawback
- Comparing only the rate and ignoring fees and minimum premium
Questions and answers
Frequently asked
What does trade credit insurance pay if a German customer goes insolvent?
It pays the insured receivable up to the credit limit minus your retention, usually 70 to 90 percent. You must have respected the limit and reported the overdue amount on time. Payment usually follows a few weeks after the claim is proven.
Does the customer have to be formally insolvent?
Not with good policies. If the buyer does not pay within an agreed period, protracted default triggers the claim. Policies covering only formal insolvency are much weaker.
What happens when the insurer cancels a limit?
Goods already delivered remain insured. For new deliveries you carry the risk or ask for prepayment or security. With updated financial statements from the customer, insurers often review the decision.
Can I get a policy in English?
The binding wording is usually German. The global insurers can often provide English versions of their standard terms. We explain your duties in English, but the German text decides.
Are consumers covered?
No. Trade credit insurance covers receivables from businesses and public bodies only.
Does it help with bank financing?
Yes. Insured receivables are better collateral, and many German factoring companies require or reward credit insurance.
How long does a contract run?
Usually one to three years with automatic renewal unless cancelled on notice. Credit limits can change at any time regardless of the term.
Why use a broker?
Because policies differ on protracted default, deadlines, clawback and maximum indemnity, and insurers' appetite differs by sector. We collect quotes, compare wording and help with limit requests. The insurer pays our commission.
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