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Administration Guide - Credit Limits
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What is a credit limit?
It is the maximum amount covered in terms of the policy on a particular buyer for any cause of loss as covered in your policy. This maximum amount could be confirmed to you by way of a credit limit annexure issued by us.
Why are credit limits required?
Since we are carrying the majority of the payment risk, it is not unreasonable that we should be able to exercise some control over the amount of credit we insure for individual buyers. It also protects your own interests, because you carry the balance of the risk.
How do I obtain a credit limit?
In one of three ways:
- By making use of Cregalink our online interactive service
- By establishing a limit under your limit of discretion
- By applying to us for a credit limit, using the credit limit application form
 Click here to view the sample form
What information do I need to apply for a credit limit?
All details requested on the credit limit application form (see link above) are required for each application.
The processing of your request for a credit limit may be delayed if your application form does not contain all the information requested.
What happens in response to a Credit Limit Application?
The value and terms on which we are prepared to offer cover is stipulated on a Credit Limit Annexure which will be sent to you. Alternatively you may view the same information on Cregalink. Please have regard for any special condition reflected on the Credit Limit Annexure as well as the comment. A key to the comment may be found on the reverse side of the Credit Limit Annexure.
What happens if we trade in excess of the value stipulated on the Credit Limit Annexure?
This will effect the calculation of the indemnity in the event of a claim.
What do I do when I need a credit limit decision very urgently?
Use our rapid response system to obtain an urgent credit limit decision. The rapid response system can only work properly if you give us the full details (including trading styles) of the buyer and his bankers. Applications should be faxed to use, clearly marked "urgent". Unmarked applications will be treated as normal (i.e. non-urgent).
Is there a charge for using the rapid response service?
For each decision faxed to you within five working days, a once-off standard nominal fee is debited to your account at the end of the month.
Unless you have been advised of any increase, the fee is the one advised to you in your covering letter at the time of the issue of your policy.
Must I apply for credit limits for all my customers in the countries shown in the Annexure A to my policy?
Yes, if you have an all-markets policy. If you have elected to cover selected countries only, then you need only apply for limits on customers in those countries. In both instances you need not apply for limits if -
- The customer always pays with order or
- By means of an irrevocable letter of credit confirmed by a bank in South Africa
What must I do if a shipment is to be made to a country not listed in the Annexure A to the policy?
The fact that a country is not listed in Annexure A to the policy does not necessarily mean that we will not be able to cover that country. You must apply for cover in the usual way.
Note that the "whole turnover principle" in proviso 4 states that, when a country is covered, then all buyers in that country must be offered for cover.
When must I submit an application form for a credit limit?
- When your policy is issued, you must apply for credit limits for all existing customers for whom credit limits are required.
- Credit limits should be requested for new customers as soon as the first contact is made even if it is not certain that a sale will result. In this way you not only help us, but you automatically get a credit and status check on potential customers.
- If the amount for an existing limit is insufficient, you must apply for increased cover.
- Where credit is granted to governments, government departments or other public buyers, you must always apply for a credit limit.
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