What is accounts receivable insurance?

Accounts receivable insurance

Accounts receivable insurance covers you in the event of an accident that may make it impossible for businesses to keep track of who owes what.

Making sure that clients and customers pay their invoices can be a major task for small businesses. But what happens when you suffer a property loss and cannot access your receivables? In ordinary cases, you’d have to eat your losses.

This can take a major financial toll on your operations, depending on how large the unpaid bill is and how much you have in cash reserves. Accounts receivable insurance can help keep those unpaid invoices from impacting your business operations.

Accounts receivable insurance (or receivables insurance) removes some of the financial stress around your property loss by allowing you to recreate those destroyed records of unpaid bills.

What does accounts receivable insurance cover?

Accounts receivable insurance covers you in the event of an accident that may make it impossible for businesses to keep track of who owes what.

This scenario can come with direct costs to your business’s bottom line and cash flow. It can also create a whole host of other expenses that might be more discrete but can add up quickly. Accounts receivable insurance can help pay for a significant number of them.

Here are a few examples of what accounts receivable insurance covers:

  • Loss of accounts receivables records: if you suffer a data loss or other qualifying accidents that damage your payment records
  • Interest payments on related loans: if your business takes out a loan to cover losses due to unpaid bills
  • Additional collections costs: if you have to spend extra on collections efforts, your policy may reimburse you

If your business operates on slim margins or needs steady cash flow to function, then the coverage that accounts receivable insurance provides might be essential.

Why is accounts receivable insurance important?

Accounts receivable insurance is a helpful policy to have if your business’s cash flow relies significantly on major invoices being paid on time.

An accounts receivable insurance policy covers you in the event that your payment records are destroyed or lost. When these records are destroyed or damaged—say, in a fire—businesses may no longer be able to track down outstanding debts. An accounts receivable insurance policy will cover the money you can no longer retrieve.

Better still, accounts receivable insurance can also help you build a more robust accounts receivable setup. Most policies will pay to have data recovery specialists work to recover lost data.

Accounts receivable policies even cover loan interest if you need to borrow money. This can help make it easier for your business’ cash flow to remain stable when you have trouble getting invoices paid like normal. You’ll also get reimbursed for costs incurred when chasing down payments related to the claim.

Protect your business

Insuring your business doesn’t need to be complicated. Thimble is here to help small businesses navigate their coverage options to pick the plans they need and avoid those they don’t. Our policies cover more than 140 professions confidently and affordably, making it easier than ever to pick out the right suite of insurance policies for you.

Getting covered takes less than a minute: just click on “Get a Quote” or download the Thimble app. Then all you need to do is answer a few questions, purchase with a click, and we’ll send your policy and Certificate of Insurance to your inbox immediately. You’re on your way to getting the coverage you need in order to protect and grow your business.

When you need flexible, on-demand general liability or professional liability coverage, get insured with Thimble. And when you need to collect cash, don’t hope that your clients and customers will pay on time. Get accounts receivable insurance and run your business with confidence.

The content on this page has been verified by
Terri Hitchcock, JD
Chief Insurance Officer, Thimble
Terri has 38 years of industry experience and knows a thing or two about insurance, so she reviewed and approved everything on this page.

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