It has been announced today that businesses with supply chains which rely on Trade Credit Insurance (TCI) and who are experiencing difficulties maintaining cover due to Coronavirus will get support from the Government.
TIC provides cover to hundreds of thousands of business, particularly in non-service sectors, such as manufacturing and construction. It insures suppliers selling goods against the company they are selling to defaulting on payment, giving businesses the confidence to trade with one another.Due to Coronavirus and businesses struggling to pay bills, they risk having credit insurance withdrawn, or premiums increasing to unaffordable levels.
To prevent this from happening, the Government will temporarily guarantee business-to-business transactions currently supported by TIC ensuring the majority of insurance coverage will be maintained across the market. This will support supply chains and help businesses to trade with confidence as they can trust that they will be protected if a customer defaults on payment.
Business Minister, Paul Scully, said:
“Giving businesses the confidence to continue trading is vital to seeing us through this crisis. This guarantee will be essential as we seek to reopen new sectors of the economy and get the UK back to work in a way that is safe for everyone.”
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 firms 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 end of May.
The guarantee will be temporary and targeted to cover coronavirus economic challenges, and will provisionally last until the end of the year. It will be followed by a review of the TCI market to ensure it can continue to support businesses in future. Further details will be announced in due course.
For further details please contact our dedicated Coronavirus support team c19support@cowgills.co.uk
Disclaimer
The information was correct at time of publishing but may now be out of date.
