Jurisdiction(s):
United Kingdom

Key definition

Accounts receivable definition

What does Accounts receivable mean? In legal practice, accounts receivable are the monetary amounts a business or individual is entitled to be paid by customers for goods or services already supplied on credit. They are commonly referred to as trade debts or book debts. The term is generally descriptive rather than a term of art, though in England and Wales and Northern Ireland “receivable” is defined for the limited purposes of the Business Contract Terms (Assignment of Receivables) Regulations 2018, which limit bans on assigning receivables in certain business contracts. In Scotland, the Moveable Transactions (Scotland) Act 2023 modernises assignation and security over “claims” (which include...

Trade credit insurance: coverage, risk classifications, policy mechanics, credit limits, insured percentages, payment terms, claims process, exclusions, and interfaces with banks and other financiers

Published by a LexisNexis Insurance & Reinsurance expert

Practice notes

Trade credit insurance generally protects a policyholder against unpaid receivables arising from protracted default (i.e. when an invoice is not settled after its due date), buyer insolvency, or political risk. By shifting credit exposure off the policyholder’s balance sheet, it can strengthen profit and loss accounts, and may lead to lower bad debt provisions.

Types of risk insured

Trade credit insurance risks are commonly divided into commercial and political risks:

Commercial risk: usually the buyer’s insolvency resulting in a payment default, or the buyer’s failure to pay for the goods on the due date
Political risk: the possibility that a government buyer or a country blocks completion of a transaction or does not meet its payment obligations. Examples include:
- regulatory or legislative freezes on payments
- expropriation or confiscation of goods
- import and export embargoes
- unforeseeable extraordinary measures of third countries
- war, hostilities, rebellion, insurrection, revolution, riot, or civil commotion abroad preventing payment or collection of the contract price...

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Michael Morris

Clyde & Co LLP

Michael is a re/insurance lawyer based in Clyde & Co's Dubai office who specialises in litigation, trade-credit and political risk insurance (contentious and non-contentious), reinsurance disputes, professional liability claims and subrogated recoveries.Michael's experience includes: Acting on a wide range of complex, high value trade-credit policy coverage disputes in the UAE local Courts, the Dubai International Financial Centre, and the ICC Court of Arbitration; Handling a wide variety of international insurance and reinsurance disputes; Drafting and advising on a variety of policy wordings on behalf of trade-credit and political risks insurers (both ECAs and private market); Defending high profile professional liability claims; andPursuing subrogated recovery actions on behalf of PAR re/insurers. Michael also has experience of advising and defending local insurers and their reinsurers in relation to Bankers' Blanket Bonds, Contractors' All Risk, Property All Risk, and Group Life Credit Assurance policy coverage...

Rebekah Jones

Clyde & Co LLP

Rebekah is an experienced insurance disputes lawyer with a decade of legal practice in the Middle East. Rebekah’s day-to-day legal expertise include advising insurers, reinsurers and their insureds in relation to complex, high value, coverage and liability disputes across several business lines, with a particular focus on cyber and trade credit. Rebekah has represented clients throughout all stages of the litigation process in the courts throughout the GCC, and various financial free zones, including the DIFC Court and QFC Court. She also has experience acting for clients in international arbitrations and mediations. Rebekah has worked on several high-profile trade credit claims, many of which have attracted media attention. Examples of Rebekah’s experience include: defending insurers in two high-profile DIFC Court cases brought by commodity trading policyholders, with claims totalling c. US$8m, following the collapse of Phoenix, one of the world’s largest rice traders...

Web page updated on 22/05/2026

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