The Government has pledged to support UK businesses further through Trade Credit Insurance guarantees. Trade Credit Insurance protects businesses against the cost of their customers being unable to meet their contractual obligations because of Insolvency Default or a Political event which prevents payment. In 2018 £450 million was paid in premiums to cover £350 billion in business trade. As other governments have pledged support, it was critical that the UK Government provide the same for UK industry.
As the Coronavirus pandemic has left the Economy unstable, businesses are currently facing the withdrawal of buyer limit cover under their existing Credit Insurance policies and the prospect of increased costs at renewal due to the significant up lift in claims the underwriters are projecting as a result of the COVID-19 crisis.
David Wilson, Head of Trade Credit & Surety NI & Scotland commented that this is “a very welcome update from HM Treasury today. The devil is in the detail, so hopefully we will see a comprehensive package, to support the Trade Credit Industry and ultimately the wider economy to trade on normal credit terms.”
Read the Government announcement here for further detail.