Collapse cover scheme extended
Trade credit insurance top-up scheme extended by six months because it freezes out businesses already affected during one of the most hostile climates in living memory
A vital scheme plugging a gap in the insurance cover which guards suppliers
against clients going bust has been extended by six months because it froze out
businesses already affected during one of the most hostile climates in living
memory.
The £5bn trade credit insurance top-up scheme covered companies affected
since 1 April after insurers increasingly withdrew or slashed cover as
insolvencies rose, demanding confidential management accounts instead of less
timely annual reports.
The scheme has now been backdated to October last year to cater for companies
affected before that date, one leading trade credit insurer said.
Shaun Purrington, regional director of Atradius, said: ‘The original scheme
generated considerable interest within the business community. However, the
take-up has been lower than expected and we hope the revised scheme will
encourage businesses to take advantage of the extended terms.’
The scheme, which runs until 31 December 2009, allows suppliers to purchase
government-backed insurance to restore cover to the original level or double the
amount they are able to obtain from the private sector up to the value of £1m,
whichever value is lower.
But experts have claimed accountants providing better information could
improve credit ratings.
‘The question for SMEs is: “How do I improve my credit rating with
insurers?”’ said Richard Brooks CEO of FD Solutions. ‘That is where accountants
can help. They need to get accurate, complete and timely information to the
right parties.’
