What is Insurance Premium Finance (IPF)?
Insurance Premium Finance (IPF) is a fixed-price, 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 lender can cancel the policy, obtain a refund of the unused portion and 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 lender 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
| Features | Benefits | |
| Unsecured or secured policies. | In most instances no additional security required. | Finance is generally available without tying up other business and personal assets. |
| Flexible financing term | Max. term is the lesser of the remaining period under the insurance policy being financed, and 12 months. Min. term is 6 months. | Smooths cash flow by breaking one lump sum payment into a series of payments over the year. |
| Budget with certainty | Competitive fixed monthly instalment. | Assists cash flow and planning with known fixed monthly instalments |
| Loan Amounts | Minimum loan amount $5,000 | Assists working capital by breaking one lump sum payment into a series of payments over the year. |
| Potential tax benefits | Simple bank loan facility. | Deductions may be available on the interest paid on the facility. |
| Cancellable | Non-cancellable | |
|
Directors Guarantees |
Maximum exposure exceeds $500,000 (excluding public companies), or where professional indemnity insurance (e.g. accountants, solicitors and medical practitioners) is financed through a company (i.e. where the partners are not the borrowers) | Directors guarantees where maximum exposure exceeds $250,000 (excluding public companies)
NB: Additional collateral security may be sought where the lender considers the unsecured risk unacceptable. |
| When are financials required?
|
When loan amount is >$250,000 | When loan amount is >$125,000 |
| NB: Financials are not required for renewal of a previously funded insurance premium funding arrangement (cancellable or non-cancellable) where the increase is ≤ 25% of the previously approved limit up to a maximum of $350,000 | ||
| When does a cancellable policy become a non-cancellable policy? | Any policy >$100,000 where an insured party has not signed the offer to borrow document | |
Detailed Listing of Insurance Types
|
Secure (Cancellable ) Policies |
Unsecured (Non-Cancellable) Policies |
|
| Aircraft/Aviation*
Accident Bloodstock/Mortality Board for Liability Boiler Explosion Broadform Liability Burglary & Theft Business Insurance Business Interruption Business Pack Caravan Insurance Carriers CGO Business Civil Pack Liability Club Protect Commercial Motor Vehicle Commercial Package Computers Consequential Loss Construction Contract Works (Contractors) Corporate Travel Defamation Delivery & Driver Directors & Officers Liability Earthquake Education Package Electronic Equipment Employment Practices Engineering insurance Ex Territorial W/comp Expatriate Insurance Farm Motor Insurance Farm Pack Fidelity Insurance Fire Fleet Insurance Forefront insurance General Insurance General property Glass Goods in Transit Group PA Heavy Motor Vehicle Home Insurance Hospital |
Hostpak
Household Income Protection Insurance Industrial Special Risk Instant Profits Insurance Jewellers Block Journey Injury Keyperson Insurance Kidnap, Ransom, Extortion Landlord Insurance** Liability Insurance Liquidate Damage Excess of Loss Livestock Machinery Insurance Malicious Product Tamper Management Liability Marine * Marine Cargo Marine Carriers Liability Marine Liability Marine Transit Masterpiece Home Coverage Material Damage Medical (Miscellaneous) Money (Cash in Transit) Motor Composite Motor Fleet Insurance Motor Vehicle Multi-Peril Insurance Multi-Risk Policy Oilmens Plan Overseas Placement Package Underwritten Risk & Professional Liability Personal Accident Plant Private Pleasure Craft Property Damage Prospective Foal Public/Products Liability Retail Miscellaneous Stamp Duty Tax Probe Transport Travel Umbrella Liability Voluntary Workers Insurance
|
Credit Insurance
Crop Insurance Debtors/Trade Indemnity Hail Damage Marine Hull Insurance New Builders Warranty Insurance (Home Ins) Professional Indemnity Insurance # Trade Credit Workers Compensation
# Excess/Deductible payments relating to PI policies that were refunded via Westpac in IPF can also be funded via IPF.
|
|
Unsecured (Non-Cancellable) Business Risks |
||
| Commercial 3rd Party Registration & Assoc Fees
Practicing Certificates Rego/Greenslips
*Check whether cancellation fee is applicable. Cancellation fee = Unsecured
**Landlord insurance can be funded only if it is over a commercial property |
||
NB:
- Should a policy not be listed then confirmation must be made with the Insurer to determine if cancellable.
- If an insurer provides the policy as non-cancellable, we will treat it as such.