Government to support businesses through Trade Credit Insurance guarantee

Government to support businesses through Trade Credit Insurance guarantee

Businesses with supply chains which rely on Trade Credit Insurance and who are experiencing difficulties maintaining cover due to Coronavirus will get support from the government, the Economic Secretary to the Treasury, John Glen has announced.

– The guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market.

– The guarantee will cover trading by domestic firms and exporting firms and the intent is for agreements to be in place with insurers by end of this month.

– The guarantee will be temporary and targeted to cover Coronavirus economic challenges, and will provisionally last until the end of the year. It will be followed by a review of the TCI market to ensure it can continue to support businesses in future. Further details will be announced in due course.

– The UK government will work with businesses and the industry on the full details of the scheme to ensure firms are supported and risk is appropriately shared between the government and insurers.

 

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 selling goods against the company they are selling to defaulting on payment, giving businesses the confidence to trade with one another.

Commenting on the launch of a temporary government backed guarantee to support the provision of trade credit insurance for businesses, British Chambers of Commerce Director General Adam Marshall said:

“The government has demonstrated once again that it is listening to the concerns of our business communities.

“The launch of a government-backed guarantee to support the provision of trade credit insurance will help ensure that this vital lifeline remains available to businesses during and after this crisis, helping to maintain supply chains and trade.”

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