Accounts receivable insurance protects a business from losses arising due to an inability to collect outstanding receivables caused by the direct loss, damage, or destruction of accounting records by an insured peril. Coverage typically includes reimbursement for receivables that become uncollectible because the records cannot be reconstructed, as well as any extra expenses incurred to recover or reconstruct these records. It also commonly covers interest payments on loans necessary to bridge the period during which collections are reduced. For instance, if a fire destroys an automotive repair shop’s invoices and customers refuse to pay because records can’t be reconstructed, accounts receivable insurance covers these losses. Keeping duplicate records safely stored off-premises is a highly recommended practice, significantly reducing coverage costs. Additionally, insurance can be arranged to protect both electronic and paper records.