Trade Credit Insurance provides cover to hundreds of thousands of business to business transactions, particularly in non-service sectors, such as manufacturing and construction. It insures suppliers selling goods against the business they are selling to defaulting on payment, giving businesses the confidence to trade with one another.
However, due to the coronavirus outbreak, with businesses finding it difficult to pay bills, many businesses seeking to benefit from this cover have seen credit insurance withdrawn or premiums increase to unaffordable levels. To prevent this from happening, the Government has said that it will temporarily guarantee business to business transactions currently supported by Trade Credit Insurance.
The guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market.
The government will work with businesses and the industry on the full details of the scheme to ensure businesses are supported and risk is appropriately shared between the government and insurers.
The guarantees will cover trading by domestic firms and exporting firms and the intent is for agreements to be in place with insurers by the end of this month.
Further information on this announcement can be found at:
https://www.gov.uk/government/news/government-to-support-businesses-through-trade-credit-insurance-guarantee
The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.
The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.
Share this article