Trade credit: data model

The entities, fields, enumerated values and relationships. The endpoints over them are in Trade credit: API, and the terms used throughout are defined in Insurance concepts.

tradeCreditCoverage is the policy held by a seller, and debtor is the buyer whose failure to pay is the insured event. The buyer is not a party to the policy and need not know it exists, which is why debtor carries financial statements, a credit rating and a parent company: the insurer is underwriting a company that never signed anything.

erDiagram
    TRADE_CREDIT_COVERAGE {
        string policyNumber
        datetime inceptionDate
        datetime expiryDate
        enum status
        float discountAmount
        float premiumRate
        float grossWrittenPremium
        float salesTax
        float brokeragePercentage
        float brokerageAmount
        enum premiumPaymentFrequency
        string endorsementID
        datetime endorsementDate
        enum endorsementType
        ref debtor
        enum peril "tradeCreditPeril"
        float voluntaryDeductiblePercentage
        float compulsoryDeductiblePercentage
        enum entityType "legalEntity ref"
        int creditLimit
        int creditLimitUtilized
        string sectors "UK SIC"
        enum tradeCreditType
        int overdueWithDebtor
        int maxCreditPeriod "days"
        int waitingPeriod "days"
    }
    DEBTOR {
        string name
        string ultimateParentCompany
        enum legalForm "legalEntity ref"
        ref address
        string owner
        string ownerTradingName
        date ownerDateOfBirth
        string sectors "UK SIC"
        string registrationNumber
        int netAssets
        int annualizedTurnover
        date accountsNextDueDate
        date latestFinancialsDate
        string creditRating
        string vat
    }
    TRADE_CREDIT_TYPE {
        int code "0-3"
        string description "Whole Turnover/Key Accounts/Single Buyer/Transactional"
    }
    TRADE_CREDIT_PERIL {
        int code "0-3"
        string description "bankruptcy/insolvency/protracted default/political"
    }
    LEGAL_ENTITY {
        int code "0-4"
        string description "sole trader/private ltd/public ltd/general partnership/limited partnership"
    }

    TRADE_CREDIT_COVERAGE ||--|| DEBTOR : "covers"
    TRADE_CREDIT_COVERAGE ||--|| TRADE_CREDIT_TYPE : "of type"
    TRADE_CREDIT_COVERAGE ||--|{ TRADE_CREDIT_PERIL : "covers"
    DEBTOR ||--|| LEGAL_ENTITY : "legal form"

Selected fields

tradeCreditCoverage carries the standard policy lifecycle in full: inceptionDate, expiryDate, status, discountAmount, premiumRate, grossWrittenPremium, salesTax, brokeragePercentage, brokerageAmount, premiumPaymentFrequency, endorsementID, endorsementDate and endorsementType. Same names, same types and same value sets as every other coverage type, so anything that already handles motor or property handles these unchanged. The fields below are the ones specific to this line.

Entity	Field	Type	What it means
TradeCreditCoverage	tradeCreditType	enum	How much of the seller’s book is covered. Whole turnover (every customer), key accounts (the largest few), single buyer (one), or transactional (one shipment)
TradeCreditCoverage	peril	enum (tradeCreditPeril)	Which causes of non-payment count. Bankruptcy, insolvency, protracted default, political risk
TradeCreditCoverage	creditLimit	Number/integer	The most the insurer will cover against this buyer
TradeCreditCoverage	creditLimitUtilized	Number/integer	How much of the limit is currently in use. Headroom is the difference. Spelled creditLimitUtiilized on the wire
TradeCreditCoverage	maxCreditPeriod	Number/integer	The longest payment term the cover allows, in days. Invoice a buyer on longer terms and the debt falls outside the policy
TradeCreditCoverage	waitingPeriod	Number/integer	How long a debt must stay unpaid before it can be claimed. Protracted default is time passing rather than an event, so it needs a threshold
TradeCreditCoverage	overdueWithDebtor	Number/integer	How much is currently past due with this buyer
TradeCreditCoverage	sectors	Text (UK SIC)	The industries covered, as SIC codes
TradeCreditCoverage	entityType	enum (legalEntity)	The buyer’s legal form. Spelled entitytype at source
Debtor	ultimateParentCompany	Text	The group parent. A subsidiary’s creditworthiness often rests on whoever stands behind it
Debtor	legalForm	enum (legalEntity)	Sole trader, private limited, public limited, general partnership or limited partnership. This decides who can be pursued for the debt
Debtor	netAssets	Number/integer	Fixed plus current assets, less current plus long-term liabilities
Debtor	annualizedTurnover	Number/integer	Revenue, which sizes what an exposure to this buyer means
Debtor	latestFinancialsDate	Date	When the accounts being relied on were drawn up. Stale accounts are a risk signal in themselves
Debtor	accountsNextDueDate	Date	When the next filing is due
Debtor	creditRating	Text	Rating from S&P, AM Best or Fitch

What to watch

Two names are misspelled on the wire and stay as they are. The type enumeration is tradeCreditTpe and the utilisation field is creditLimitUtiilized, with a doubled i. Both are already implemented everywhere the standard was adopted, so correcting them would break working integrations. Send them as written. A third, entitytype with a lowercase t, is shown corrected above.

Political risk overlaps with a separate product. tradeCreditPeril code 3 is political risk, and the product catalogue carries political risk insurance as its own line of business. Nothing draws the boundary between them. Decide which you are selling before you rely on the peril.

waitingPeriod has no state behind it. Nothing signals entering or leaving it. Treat it as a calculation against the loss date at the point a claim is filed.