Can I insure individual customers against non-payment?
In short
Yes, but not in every policy. The standard German whole turnover policy wants all your business customers, which keeps the rate at about 1 to 3 per mille of turnover. You can insure individual customers against non-payment with single buyer or single risk cover. It costs more per euro, and the insurer must first check the customer and grant a credit limit.
No insurer in Germany publishes fixed prices for single buyer cover. We therefore list the building blocks of the premium.
Example
Typical range
Whole turnover policy for comparison
about 1 to 3 per mille of insured turnover
Credit check per named customer
about EUR 5 to 100
Minimum premium, also for a single customer
about EUR 500 to 6,000 a year
Retention in a claim
10 to 40 percent of the debt
Ranges from a German guide updated in May 2024, checked in October 2026.
That single buyer cover costs more per euro of limit than a whole turnover policy is a guide value
from our quoting practice.
The price for your customer comes with the quote.
Worked example
Supplier with one key account
A metalworking firm makes 60 percent of its sales with one customer and insures only that buyer. The insurer approves a limit of EUR 150,000 with a 10 percent retention.
Open invoices at insolvency
EUR 180,000
Insured up to the limit
EUR 150,000
Payout at 90 percent
EUR 135,000
Own loss, retention and excess
EUR 45,000
Without cover EUR 180,000 would be lost. With single buyer cover EUR 45,000 remains, because EUR 30,000 was delivered above the limit.
Why insurers prefer all your customers
Credit insurers in Germany work on the principle of whole turnover cover (Ganzheitlichkeit): all receivables from business customers go into the policy. If everyone could insure only the individual customers that worry them, insurers would end up with mostly bad risks.
That is why cover for individual customers costs more per euro of turnover and is checked more closely. With many customers, a whole turnover policy is usually cheaper, even though it includes buyers who would never default.
Three ways to cover selected customers
Which route fits depends on whether you deliver continuously to a key account or want to protect one large contract. Even in a whole turnover policy, small customers below a discretionary limit run without their own credit limit.
Route
Suits
Catch
Single buyer cover
a few key accounts with ongoing deliveries
higher rate, minimum premium still applies
Single risk cover
plant engineering, custom builds, projects
only this contract is covered
Whole turnover policy
many small and some large customers
all business customers are declared
Excess of loss cover
firms with strong in house credit control
pays only above a high own share
If the insurer refuses your customer
If the insurer grants no limit or only a small one, that is a statement about the customer's ability to pay. You then cannot insure that individual customer against non-payment, and you should take the refusal seriously.
Alternatives are prepayment, staged payments before delivery, a bank guarantee from the customer or an extended retention of title (verlängerter Eigentumsvorbehalt). Some insurers review the decision if the customer provides recent accounts.
The customer is already wobbling
Nobody insures invoices that are already overdue. Only future deliveries to individual customers can be covered, and only if the insurer still considers the risk acceptable.
Be careful with instalment deals for a struggling customer. If it later becomes insolvent, the administrator can claw back payments if you knew about the crisis (sections 129 ff. of the German Insolvency Code, InsO). Only policies that include clawback cover pay then.
When single cover makes sense and when not
Covering individual customers makes sense if one or two buyers account for a large share of your sales and their default would threaten your business. Typical cases are suppliers to industry and makers of custom products.
It does not make sense with many medium sized customers. Insuring several of them one by one quickly costs more than a whole turnover policy at a lower rate.
Step by step
Identify the customers whose default would really threaten your business.
Work out the highest balance each of them owes during the year.
Ask for a quote for single buyer cover and one for a whole turnover policy.
Compare both including minimum premium and check fees.
Once insured, never deliver more than the approved limit.
Checklist
Highest open balance per customer known
Limit for each chosen customer approved in writing
Non-payment without formal insolvency covered
Clawback cover included if you agree instalments
A plan for the day the limit is cut
Common mistakes
Trying to insure a customer only after it has started paying late
Delivering above the limit and forgetting the excess
Insuring five customers separately when a whole turnover policy is cheaper
Treating a limit refusal as a formality
Questions and answers
Frequently asked
Can I insure one large contract only?
Yes, as single risk cover.
It suits projects such as plant or custom builds; only that contract is covered,
often including the risk before delivery.
Can I add customers later?
Usually yes.
You apply for a limit for each new customer;
the insurer checks its credit and recalculates the premium.
Will my customer find out?
Usually not.
Checks run through credit agencies and the insurer's own data.
For high limits the insurer may ask the customer for recent figures.
What about customers abroad?
Foreign customers can be insured individually too.
Checks cost more, and political risks are only included if the policy says so.
Can I insure consumers individually?
No.
Trade credit insurance covers only debts owed by businesses and public bodies,
not by private individuals.
Who helps me choose?
Norman Nammert, as an insurance broker (Versicherungsmakler),
obtains quotes for single and whole turnover cover and compares them.
