New Biba trade credit insurance scheme will be offered through CMR Insurance Services
Biba has launched a trade credit insurance scheme following the recent high profile company collapses, including Monarch, and Palmer & Harvey.
Biba head of technical services Mike Hallam said: “For members, this provides access to a class of insurance that can be invaluable to businesses. There is no question that there is a need for this type of insurance, according to the Association of British Insurers (ABI), in 2016 trade credit insurers paid out an average of £4 million per week in claims settlements.”
CMR Insurance Services (CMR), the appointed representative of trade credit insurer Atradius, will provide Biba members with access to trade credit insurance.
Trade credit insurance
Trade credit insurance protects businesses from the risk of clients not paying or being unable to pay invoices. This is intended to reduce the risk of a bad debt taking down a business.
The riskier a business is to trade with, the higher the premiums will be; or the credit insurer may reduce or pull cover for a business, making trading conditions harder.
For example, when Poundland’s South African owner Steinhoff was hit with a scandal in December, trade credit insurer Atradius reduced cover for it, leading to rumours that other trade credit insurers including Euler Hermes could follow suit.
Trade credit insurance supported £314 billion of UK trade last year, according to Biba.