In the world of business, partnerships are all about collaboration and synergy. It’s no different for the insurance industry. Credit insurance companies need partners that can help them streamline their business processes, provide them with new products, and even offer legal services when needed.
A partnership with a legal firm might seem like a strange choice for an insurance company. After all, what do these two seemingly unconnected organizations have to gain from working together? The answer lies in how both of them offer value to the other party. Legal partnerships are the perfect solution for credit insurance companies looking to cut costs and improve efficiency at the same time. These partnerships have several benefits for both parties, as outlined below:
Credit insurance is a type of insurance that helps businesses manage financial risk. When selecting a credit insurance policy, it is important to understand your risk and select the correct policy for your business. Credit insurance policies protect against loss of existing, future, and operational cash flow. It is important to select the correct policy based on the financial risk you are trying to manage.
Protect against potential credit losses only
Credit insurance policies that are designed only to protect against potential credit losses do not have coverage for existing or future receivables. If a customer does not pay the debt that your business is owed, this policy will cover the full amount due. Be sure to select a policy that has a “no-pay” trigger, meaning that a claim is triggered only when a customer is 90 or more days delinquent. Again, select a policy that has a “straight” trigger, meaning that a claim is triggered when a customer is 30 or 60 days late on their payment. Credit insurance policies that only protect against potential credit losses will not have an escrow hold. This means that the policy will pay only the amount that the customer owes, with no potential for your business to receive payment from the insurer.
The credit insurance industry is continuously evolving as partners seek new ways to increase adoption and usage of these policies. One partnership that has proven effective in this regard is the legal services partnership. These partnerships are typically structured in a way where one company agrees to provide legal services for the other on a fixed contractual fee basis, which allows the partner to offer its products at a more affordable price without sacrificing profitability or risk.
A legal services partnership enables credit insurance providers to obtain much-needed assistance with laws and regulations related to their business, avoiding pitfalls and cutting red tape. In this article we’ll explain why you should consider initiating a legal services partnership in your organization, explore some of the most common examples of such partnerships, and outline how you can build one in your organization.