Economic uncertainty leads to increase in trade credit insurance claims

The Association of British Insurers (ABI) most recent Trade Credit Insurance survey has shown a 19% increase in the number of claims from the previous year to 11,000 with the value of these claims rising 42% to £149m.

A similar, albeit more significant, the increase occurred in 2008 when the same claims doubled as the financial crisis took hold. Mark Shepherd, ABI General Insurance Policy Manager, said: “Economic uncertainty appears to be causing firms to claim on their insurance if one of their customers pays late, or not at all”.

The figures indicate that many smaller businesses face the risk of larger customers entering into formal insolvency, a recent example being the administration of high street retailer BHS, who owed money to in excess of 1,200 creditors.

If you are a director of a company affected by late payment of debts or the insolvency of a customer, we encourage you to contact us and speak with one of our experienced Practitioners who will be more than happy to provide guidance and advice. An initial consultation is provided free of charge. Contact us.