What Is Accounts Receivable Insurance Coverage?

Accounts receivable insurance can help cover losses if your business can’t collect money from customers because your billing records were damaged or destroyed by a covered event, like a fire, theft or water damage.

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Updated: 04/14/2026

Read Time: 3 minutes

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Key Takeaways

Accounts receivable insurance can help protect your business when a covered loss causes physical damage to your accounts receivable records.
This coverage may help when lost or damaged records prevent you from proving amounts owed, but it doesn’t cover lost income, accounting errors or customer nonpayment.
This coverage is available as part of a Business Owner’s Policy (BOP) and can be customized with higher limits for added protection.

How Does Accounts Receivable Coverage Work?

Accounts Receivable coverage can help when a covered loss results in direct physical damage to your company’s records of accounts receivable. If a covered loss occurs and a claim is filed, the coverage focuses on the impact of that physical damage on your ability to establish amounts owed to your business.

This coverage is available through our Business Owner’s Policy (BOP) as a part of commercial property insurance protection.

Accounts receivable insurance protection involves these simple steps:

Coverage Assessment

If a covered loss like a fire, theft or water damage occurs, you’ll need to file a claim with your insurance company. Once you file a claim, the claims manager will evaluate whether the covered loss caused direct physical damage to your accounts receivable records, subject to the terms and conditions of your policy.

Claims Processing

When you submit a claim, the claims process focuses on the physical loss or damage to your accounts receivable records and how that loss affects your ability to establish amounts owed. Coverage determinations are based on the policy terms and the documentation available following the covered loss.

Frequently Asked Questions About Accounts Receivable Insurance

Does This Endorsement Provide Coverage if a Customer Does Not Pay Their Bill?

No, accounts receivable insurance doesn’t cover customer nonpayment when records still exist. This coverage applies only when a covered loss causes direct physical damage to accounts receivable records that prevents you from establishing amounts owed.

What Is an Example of an Accounts Receivable Claim?

Here are a few examples where accounts receivable insurance may apply:

A fire at your place of business destroys your hard copy and electronic accounts receivable records. As a result, your business is unable to establish proof of receivables owed by customers.
If your accounts receivable records are destroyed by water damage from a burst pipe, your accounts receivable insurance can help.

Do I Need Accounts Receivable Insurance?

It’s a good idea to have this coverage if your business relies on a few key customers for a significant portion of their revenue each year. It’s a key coverage to have if you want to protect your cash flow and increase financial stability during times of economic uncertainty.

Get a Quote for Accounts Receivable Insurance

We’ve been protecting businesses like yours for over 200 years. Our specialists can work with you to customize a BOP with the accounts receivable endorsement you’re looking for. To learn more about accounts receivable insurance, get a free quote today.

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This page outlines in general terms the coverages that may be afforded under a policy from The Hartford. All policies must be examined carefully to determine suitability for your needs and to identify any exclusions, limitations or any other terms and conditions that may specifically affect coverage. In the event of a conflict, the terms and conditions of the policy prevail.

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