COVID-19 update – 8 June – Trade credit insurance

The Government is to provide guarantees of up to £10 billion to Trade Credit Insurance schemes.

Trade Credit Insurance provides cover to businesses against the company they are selling to defaulting on payment. So giving businesses the confidence to trade with one another. It provides essential cover to hundreds of thousands of business-to-business transactions.

Due to coronavirus and businesses struggling to pay bills, there is a risk of credit insurance being withdrawn or premiums increasing to unaffordable levels, which could cause serious issues for liquidity and working capital across business supply chains.

The government support which has been agreed following extensive discussions with the insurance sector, will see the vast majority of Trade Credit Insurance coverage maintained across the UK. Helping businesses during the coronavirus pandemic to trade with confidence, safe in the knowledge that they will be protected if a customer defaults or delays on payment.

The scheme will be followed by a joint BEIS/HMT-led review of the Trade Credit Insurance market to ensure it can continue to support businesses in future.

To protect businesses that the private credit market cannot insure, export credit insurance is also available from UK Export Finance to cover UK exports to 180 countries. Government-backed export insurance from UKEF can protect an exporter in the UK against the risk of not getting paid when selling internationally.

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