What is Insurance Premium Finance (IPF)?
Insurance premium finance (IPF) is a fixed-rate, full recourse loan made to a business customer to finance the total cost of premiums on certain types of business insurance.
Cancellable business insurance policies are generally considered to be secured lending. If the customer defaults, the bank can cancel the policy, obtain a refund of the unused portion of the premium and clear the debt.
Non-cancellable business insurance policies are generally considered to be unsecured lending. This is because the policy cannot be cancelled and the bank cannot get any refund. Types of non-cancellable insurance policies include workers’ compensation and professional indemnity. Unsecured lending also includes practising certificates and motor vehicle registration fees.
Insurance Premium Finance is available on most types of business insurances, including:
• General business insurance premiums
• Motor fleet policies
• Public liability premiums
• Professional indemnity
• Motor registration fees and CTP insurance
* Check whether cancellation fee is applicable. Cancellation fee = Unsecured
** Landlord Insurance can be funded only if it is over a commercial property
Only Australian or United Kingdom licensed insurers/underwriters are acceptable.
1. Should a policy not be listed then confirmation must be made with the insurer to determine if cancellable.
2. If an insurer provides the policy as non-cancellable, it will be treated as such.