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TRADE CREDIT INSURANCE

One issue during the Coronavirus outbreak has been a diminution in the terms of trade credit insurance.  To address this market failure, BEIS has developed the trade credit reinsurance scheme which will allow coverage to be maintained across the market with up to £10bn government backing.

If a business feels that their cover has been withdrawn (or reduced) unfairly, they will need to discuss with their insurer about reinstating cover or look to arrange the new cover under the same conditions as the previous coverage.  In terms of the limits in the market, whilst the scheme will give confidence and can provide right levels of insurance, that doesn’t mean all limits or cover that was in place would be restored.

The scheme is available on a temporary basis, backdated to 1st April and running until 31st December, although BEIS are looking at extending the scheme into next year.  You can find a list of insurers who are part of this scheme at https://www.gov.uk/government/publications/trade-credit-reinsurance-scheme.

There is more information on this subject on the Association of British Insurers’ web-site at https://www.abi.org.uk/products-and-issues/topics-and-issues/coronavirus-hub/trade-credit-insurance/ and at https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/trade-credit/ - this page also ahas a guide to trade credit insurance.