Atradius has paid out over £150 million in claims in the past three years in support of British businesses impacted by non-payment of invoices, the company says.
The claims paid have helped 11,000 British businesses to stay safe when faced with payment default by their customers. This can be due to a variety of factors from insolvency to political risk or even geographical disaster, but is most commonly due to insolvency, which remains a major threat for many businesses trading both domestically and further afield.
Trade Credit Insurance protects businesses by managing their trading risks and assessing trading partners, then insuring payment of invoices by their trade partners. If that trading partner is then unable to pay, the insurer pays out up to 90 percent of the invoiced amount, reducing the impact on the supplier’s cash flow and enabling them to continue trading as normal.
The industries with the biggest claims pay-outs include construction, the food and drink sector and agriculture.
Marc Jones, Head of Sales at Atradius UK says what is perhaps most surprising is the number of businesses who continue to trade without protecting their trade credit risks effectively: “Trade credit insurance is available, cost effective and a real asset to economic stability,” he says.
“Yet there is still work to be done to improve understanding and to dispel some of the rumours. For example, the average cost is circa £20 to cover £10,000 of business. Businesses should be asking themselves not whether they can afford to have such cover in place, but actually whether they can afford not to.”