As many Canadians begin to renew discussions around manufacturing, trade and the domestic economy, one industry leader hopes to remind brokers about a coverage that could soon offer immense business opportunities – as well as spare them a potential liability case.
“Most brokers in the Canadian market are not aware of the fact that this product even exists, so we have a mandate to elevate the awareness that brokers have around this product,” said Mark R. Attley, president, Receivables Insurance Association of Canada.
Receivables insurance helps to protect clients against any disruptions to their accounts payable books, which is gradually becoming more necessary in a world wrought with political instability and socioeconomic risks.
“The reality is that receivables is one of the biggest assets for companies’ balance sheets,” Attley said. “Arguably, as this product becomes more and more mainstream, brokers who don’t raise these concerns could be potentially exposing themselves to E&O issues.”
In fact, neglecting these policies may be akin to failing to tell clients about other coverage lines that are crucial to their insurance package.
“A good analogy is a broker who doesn’t talk to their clients about business interruption insurance,” Attley said.
On the flip side, however, brokers can benefit from the increased knowledge surrounding these perils. Attley can attest to these opportunities personally, as they helped guide his own brokerage to new heights in the 1990s and beyond.
“I used to have a niche brokerage back in 1994 focused solely on this area, and I grew a big brokerage business out of it,” Attley said.
Finally, he notes that this coverage is not only an imperative for brokers with clients who export goods, but ones that operate domestically as well. A recent high-profile bankruptcy case serves as a crucial reminder of this.
“When Target filed for bankruptcy protection, dozens of Canadian companies ended up losing millions of dollars. This is a precise example of a situation where if they had insured receivables to Target, they would have been indemnified,” he said.
To learn more about these issues, you can register for the Receivables Insurance Association of Canada’s October 8th Toronto symposium entitled “Canada’s Free Trade Agreements – Global Opportunity or Threatened by Protectionism?” here.
