The credit insurer will review your existing sales and customer base. Based on their evaluation, they’ll propose credit limits that they can insure up to. These are usually either by client or country, and will cover your business over a given time period.
Trade credit insurance usually covers an exporter’s total order book, rather than individual accounts or transactions. The insurance premium rate reflects the average credit risk of the exporter’s order book of customers. It will usually be a percentage of the credit limits covered, usually around 1 - 2%.
Typically, the policy will pay out a percentage of the value of your outstanding invoices over a given term (e.g. 12 months). If you make a claim, the policy will only pay out a given percentage of the outstanding debt owed. This figure can vary significantly, but is likely to be in the range of 75 - 95%.