The wholesaler went into administration on Tuesday after rescue talks broke down
The ABI reacted to the recent insolvency of Palmer and Harvey, the wholesaler, which went into administration on Tuesday (28 November).
Biba had already spoken about the collapse, claiming credit insurance market is set to pay big claims to unpaid suppliers.
Now ABI has given its reaction, as well as a first estimate of the value of trade credit cover on risk.
According to ABI, trade credit insurers continue to support suppliers to wholesalers and provided an estimated £100 million worth of cover for firms supplying to Palmer and Harvey.
It also says that while the administration of the firm brings unwelcome redundancies it is likely that jobs could have been at risk earlier had suppliers not had the backing of their insurers.
Mark Shepherd, head of property, commercial & specialist lines at ABI said: “The administration of Palmer & Harvey is a significant loss for the UK’s wholesale retail sector and highlights the challenges that business face in the current environment. Trade credit insurance is playing a significant role in enabling businesses to continue to trade, even in a challenging economic climate”
Mike Clark, chair of Biba’s Trade Risk Group added: “As brokers our focus is connecting our clients to the solutions that are right for them and their business and the value of trade credit insurance to enable businesses to thrive should not be underestimated; it is not only about protection when things go wrong, but as in this case, to support trade continuing during difficult times.”