Payment Insurance Plan (PIP) Coverage
5-SLN understands that the security of freight debts is of primary importance to 5-SLN Network Partners and so, has established the following Payment Insurance Plan (PIP) Coverage that covers bad debts defined as unpaid freight invoices from another 5-SLN Network Partner in the event of non-payment within 90 days of terms.
PIP Coverage is only applicable on transactions generated by locations covered by their 5-SLN Membership. Interest, Collection Fees, File Profits, Currency Fluctuations, Operational Errors, Goodwill Settlements, Acts of God, etc. are not covered. PIP coverage will only be paid following assignment of the relevant debt ownership to 5-SLN (or its nominee) and after the reporting of the debts to FDRS or FreightDeadbeats for their collection action.
To be eligible for Basic or Full PIP Coverage (detailed below), the relevant delinquent debts must have been reported to 5-SLN on a timely basis via 5-SLN's fully automated PIP Alert system (detailed below). If debts are not reported on a timely basis to 5-SLN, any PIP Coverage may be denied.
Whenever a Network Partner Profile is viewed in the Network Directory details of the PIP Coverage available is displayed for easy review.
Basic PIP Coverage:
Network Partners can be assured that 5-SLN has done a detailed and in-depth review of applicants and 5-SLN stands behind its acceptance of Network Partners by offering the following Basic PIP Coverage at NO charge:
(i) 5-SLN Network Partners with less than 5-Stars: USD 1,500 coverage against bad debts (and guarantee coverage to establish Open Account status)
(ii) 5-SLN Network Partners with 5-Stars or more: USD 3,000 coverage against bad debts (and guarantee coverage to establish Open Account status)
Full PIP Coverage:
Upon obtaining a 5-Star Rating (or earlier if requested), 5-SLN Network Partners will be invoiced for Network Fees and USD 500/annum in Payment Insurance Plan (PIP) coverage against bad debts in the aggregate total amount of USD 30,000. PIP Coverage is optional and payments are non-refundable.
Examples of PIP Coverage:
(i) Company A achieves a 5-Star rating and elects NOT to have PIP Coverage. In the event of Company X, a 5-SLN Network Partner (with 4-Star Endorsements), defaulting on its debt of USD 10,000, the PIP Coverage payable to Company A shall be USD 1,500 (Basic PIP Coverage). If Company X had 5-Star Endorsements, the PIP Coverage payable to Company A would be USD 3,000.
(ii) Company A achieves a 5-Star rating and elects to have PIP Coverage. In the event of Company X defaulting on its debt of USD 10,000 to Company A, USD 30,000 to Company B and USD 8,000 to Company C, the PIP Coverage to Company A shall be USD 6,250 (being 10,000/(10,000+30,000+8000) * 30,000). The minimum payable under this scenario would be the Basic PIP Coverage of USD 1,500 or USD 3,000.
5-SLN does not establish credit terms between 5-SLN Network Partners but believes that all transactions should be settled by no later than a maximum of 45 days after the end of the month in which the relevant invoice is dated unless alternative credit terms have been agreed. Therefore on the 15th of every month, 5-SLN will send out a reminder to have their accounting department review their open invoices from fellow 5-SLN Network Partners. If there are any open invoices, 5-SLN will intervene to assist in collection by using our on-line PIP Alert facility in the Network Partners Only Area. Persistent delinquencies from any Network Partner will not be tolerated. Failure to advise 5-SLN of any delinquencies in accordance with our monthly reminder will render ant PIP Coverage claims invalid.