Economic Secretary to the Treasury John Glen
Economic Secretary to the Treasury John Glen has announced that businesses with supply chains that rely on Trade Credit Insurance and are experiencing difficulties maintaining cover because of the current COVID-19 crisis will receive support in the form of a temporary government backed guarantee. This will help to maintain most insurance coverage across the market.
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 against the possibility of another party defaulting on payment. This gives businesses the confidence to trade with one another. However, because of the current crisis businesses are struggling to pay bills and risk having credit insurance withdrawn or their premiums increasing to unaffordable levels.
Small Business Minister Paul Scully, who recently appeared as a guest on the BESA COVID-19 webinar, 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.”
BESA members could benefit substantially from the announcement according to the Association’s Director of Legal & Commercial Debbie Petford: “The government’s Trade Credit Insurance guarantee is a positive move that should protect both businesses and customers from defaulting on their payments.”