Changes to Trade Credit Insurance Top-up Scheme
Since the 1st of May companies that have had their credit insurance cover reduced have been able to purchase six months top-up cover under the Government Scheme.
After feedback from business, the following three changes will be made to the scheme’s rules today:
1) The price of the top-up cover will be reduced from 2% to 1%
2) The £20,000 lower limit on top-up cover will be removed
3) The upper limit on top-up cover will be increased from £1 million to £2 million
Since launching the scheme, the Government has collected market information from insurers, brokers and businesses that use trade credit insurance. Evidence indicates that businesses are adapting to reductions in their insurance by managing their credit risks more actively, thereby reducing their dependence on the product.
However businesses that have not been eligible for this scheme also need the opportunity to adjust to reductions in their trade credit insurance cover. Today’s changes will allow more businesses to benefit from this extra breathing space so that they can adapt to their new circumstances in the longer term.