Top-Up-Cover

Getting through the crisis together

As a client of Euler Hermes Kreditversicherungs-AG, your company already has a threefold security shield today: - our Cover for Bad Debt Losses policy offers you

well-researched information on the creditworthiness of your customers, so that you have early warning of what business it could be risky to do

a professional debt collection service through Euler Hermes Collections GmbH for the successful collection of your receivables, thus securing your cashflow

indemnification of your claims when one of your customers can’t pay

If one of your customers gets into financial difficulties, your credit insurance policy adjusts to re-flect this fact: Euler Hermes then decides, after a careful examination of the buyer’s financial strength, up to what amount cover can still be given – sometimes by reducing cover or only accepting your limit request partially. The insolvency risk of many companies has risen steeply in the current economic crisis compared with 2008. Credit insurers have been forced to react to this with appropriate action.

Extra cover from Euler Hermes, backed up by the government

In order to provide a safety net for German companies which will still function in the present situation of increasing risks, the government has initiated a special programme: within this framework, Euler Hermes will give, for a limited period, extra cover “on top” - Top-Up-Cover.

As a client of Euler Hermes, you can get additional cover for your Cover for Bad Debt Losses policy under the Top-Up-Cover programme under certain conditions. This will give you cover for receivables which are at present not covered entirely by your credit insurance.

The four prerequisites for Top-Up Cover

Your customer has his Head Office in Germany

Your receivables are covered in principle by a Cover for Bad Debt Losses policy from Euler Hermes (primary policy) with an approved credit limit set by the insurer

Due to an increase in the risk, Euler Hermes has been forced to reduce the credit limit on your buyer or a new enquiry has only resulted in a partial acceptance of the sum you requested

The payment term for the receivables is max. 360 days

Maximum security is achievable

If the conditions set out above are fulfilled, cover for up to 100% of your receivables is possible with Top-Up-Cover, less a self-retention for your own account which is set by the government. It should be noted, however, that the Top-Up-Cover can not exceed the amount of the cover in the credit limit under the primary policy from Euler Hermes. This can thus only reach a maximum of twice the limit.

Important: The option of applying for a Top-Up Limit is only open to clients for whom the credit limit under the primary policy was reduced, or a new request only partially accepted by the insurer, from 1st September 2008. Capital Goods Credit Insurance policies, Excess of Loss policies as well as policies taken out in connection with Asset Backed Securities transactions are excluded from the programme.

And this is what you get under Top-Up Cover:

A doubling of insurance cover up to 100%

Let us take as an example an existing Cover for Bad Debt Losses policy under which Euler Hermes has up till now been able to grant your company the full cover you asked for. Due to the financial situation of your customer, it has now proved necessary to reduce the limit on him. If the reduced limit is only half the previous sum or above that (e.g. :1: 75%), you can increase it by means of Top-Up-Cover to as much as 100%. If it is 50% or less (e.g. 1: 30%), the maximum amount of cover possible is twice the reduced amount (e.g. 1: to 60%).

Exactly the same rule applies in the case of new limit requests: if Euler Hermes is able to give a partial acceptance of at least half the requested amount (e.g.: 70%), the entire amount can be increased up to 100% with Top-Up-Cover. If the partial acceptance is 50% or lower, the maximum amount permitted is double the partial acceptance (increase to 80% in the example given above).

Top-Up Cover has a ceiling:

A maximum of 2.5 million euros in credit limits are possible per buyer and policyholder. If co-insured subsidiaries are included in the policy, this ceiling applies to each of them per buyer. The Top-Up-Cover can in each case only be granted for a maximum of 6 months.

Make sure you get your extra cover now!

This Top-Up-Cover with state backing is intended to be a short-term interventionary measure to support businesses in the crisis. That is why the Federal Government of Germany has first of all set a limit to the aggregate amount of cover it is making available. In addition, the programme is only on offer for a limited period, till the end of 2010. Absent a new political decision to continue the programme, Top-Up-Cover will then end as per 31.12.2010 or when the budget for it is exhausted, if this is earlier. The costs are 2.88% p.a. plus insurance tax on each Top-Up Limit granted.

We will be happy to answer your enquiries about Top-Up-Cover under
Telephone number 040/88 34-34 44,
Fax-Number 040/88 34-36 66 or
E-Mail: topupcover@eulerhermes.com

The benefits for you at a glance:

An additional amount of cover for your existing business – even when the risk of your customer becoming insolvent increases.

Your customer relations can be maintained in a difficult environment where the risk of bad debt losses is higher.

Your company can accept more orders without endangering your own cashflow.

Everything can be had from one supplier: Euler Hermes handles your Top-Up-Cover alongside your existing credit insurance policy.

Clearly calculable costs through a fixed premium rate set by the government of 2.88% p. a. plus insurance tax for each Top-Up limit granted.

You can read a summary all the information on Top-Up-Cover in our Flyer (PDF) and in our Fact Sheets (PDF).

To apply for Top-Up-Cover you need the Application Form (PDF)
and the General Credit Insurance Conditions (PDF)

Please send the filled out application form to

Euler Hermes Kreditversicherungs-AG
- Top-Up-Cover -
Friedensallee 254
22763 Hamburg