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Protect Your Business from Bad Debts with Trade Credit Insurance

Businesses today face considerable risk from customers defaulting on payments. The current economic climate of high inflation, rising interest rates and a possible recession means the threat of bad debts is growing. That's why trade credit insurance is an essential tool to protect your business finances.

New data from the Association of British Insurers shows payouts from trade credit insurers to UK businesses hit by bad debts rose 23% in the first half of 2022 to £101 million - the highest amount since 2018. This reflects the challenging economic conditions many companies now face.

Trade credit insurance provides vital protection if a customer fails to pay for goods or services received. The policy covers the outstanding monies owed, helping safeguard your business's cash flow and viability. As well as financial protection, trade credit insurance offers valuable insight into customer creditworthiness through detailed reports on credit risks. This helps inform your lending decisions when granting credit terms.

With mounting insolvencies in sectors like construction and retail, trade credit insurance is a critical lifeline. The ABI reports the construction sector received over £29 billion in approved cover in the first half of 2022. When major builder Buckingham Group collapsed, credit insurers protected affected businesses with estimated claims payments exceeding £30 million.

In today's uncertain economic environment, trade credit insurance provides security and confidence to maintain and grow your business. The policy reduces fears around offering credit, supporting sales growth. It also provides leverage with banks to access additional finance. With financial shocks rising, make sure your business has comprehensive protection against bad debts. Speak to Keep Insurance Brokers and discover how this invaluable policy can help safeguard your company's future.


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