Government has improved the terms of its Trade Credit Insurance Top-up Scheme, the initiative first introduced in May to help businesses who have struggled with reduced cover availability as a result of the downturn.
Three changes to the scheme have been made, based on feedback from businesses. Firstly, the price of the top-up cover has been halved to one per cent. Secondly, the £20,000 lower limit on top-up cover has been removed. Finally, the upper limit has been doubled to £2 million.
Trade credit insurance allows companies to operate safe in the knowledge that they are protected if a third party defaults on a payment after a period of credit. With the stability of many firms increasingly becoming compromised since the start of the year, insurers began to withdraw credit insurance to safeguard against a major increase in payouts. Government then stepped in with its top-up scheme in an attempt to rectify the situation.
Companies who have suffered a reduction in their insurance offering since October last year can use government’s scheme in a six month policy to bring their policies back to the level it was previously at or double what they are being offered by the private sector insurer, whichever is less. The scheme runs until the end of the year.
Four credit insurers are offering policies through the scheme. They are Euler Hermes, Atradius, Coface and HCC.
