DEFINITION of 'Accounts Receivable Insurance'
BREAKING DOWN 'Accounts Receivable Insurance'
Accounts receivable insurance can be particularly useful for new or rapidly growing businesses that cannot afford to do credit checks. For a relatively low fee, accounts receivable insurance protects a company against loss on receivables, including default, bankruptcy or simply slow payment.
This insurance can also protect a company that is unable to collect receivables due to loss of the underlying records (for example, in a fire).