A limit of discretion is the maximum amount of credit that a credit provider may grant to an individual buyer (commercial or consumer), under the cover of your Trade Credit Insurance Policy, without first obtaining the approval from the Insurer. The amount and conditions attached to this limit are defined within the Trade Credit Insurance Policy.
Generally, this is done to save time, since the process of getting approval on every single buyer, regardless of the level of credit, would take a significant amount of time to process – slowing down the ability to open new accounts.
The LOD reduces the administrative time it takes to grant credit significantly.
Conditions are attached to the LOD, and vary from industry, client and insurer.