If the focus is only on risk hedging, trade credit insurance
can be helpful. Different forms can be used. Individual receivables can be insured at a fairly high price, but in a targeted manner. Classically, trade credit insurance with a blanket insurance range up to a tender limit with the obligation to apply for insurance cover above. It is also possible to exclude certain industries or countries from the contract. Of course, in crisis situations or crisis industries, the insurance will draw more cautiously. Nevertheless, this protects the policyholder. If the underwritten limits are not sufficient, there is the possibility that possibly a second top-up insurance provides additional coverage. Finally, if you want to insure yourself against the risk of large defaults and bear the risks yourself up to a certain amount, excess of loss insurance may be an option. In this case, however, you have to prove to the insurance company that you have your own, very good IT-supported customer verification processes.
All in all, there is a whole spectrum of instruments that can also be used for hedging in times of higher risk. The aim must be to compare the relevant variants and to consider different forms of arrangement in order to obtain the best possible risk protection. The aim must be to avoid jeopardizing potential sales in particular. In case of doubt, even payment plan agreements with the customer can improve the security of a transaction.
With this in mind, I wish you a good choice in your risk hedging strategy.