Trade Credit Insurance – Could it protect you from insolvency?

In recent months, we’ve seen new variants of Trade credit insurance hitting the market. But what is it and is it for you? Could it help save your business from insolvency?

If you run a business, chances are that you’ve taken out insurance for your buildings, your assets, against your employment liability, your goods and your services. But what if your retail or commercial clients can’t, or don’t, pay on time. What if they can’t or don’t pay at all? Maybe that’s something worth insuring against.


Do I need trade credit insurance?

With numerous, high profile, very large businesses becoming insolvent of late, most recently Carillion, there’s a very real knock on effect for other businesses who’ve traded with these erstwhile corporate giants.

If your business’s biggest customer suddenly went under, either with, or without several large unpaid invoices owed to your company, how would you cope? Is your cashflow sufficiently robust to be able to handle both the fallout from unpaid bills and the loss of lucrative repeat business? This is where Trade Credit Insurance might well bridge the gap and prevent you from being a secondary casualty.


Protecting your cashflow

Cash is the lifeblood of any business, so keeping your cashflow under constant review is absolutely essential to your company’s survival.  In a world where no business is entirely safe, the prospect of insuring your cashflow against the effects of your customer’s lack of liquidity could well be worthwhile and if the worst happens to your biggest customer, it gives you a better chance of not being dragged down with them.


I should have looked at this months ago

If you’re already feeling the effects of a large client’s financial distress and their unpaid bills are putting your business at risk, then there’s never been a better time than now to seek help. Insolvency practitioners aren’t just here to manage the collapse of a company, we can help save a business if we’re involved early enough. Typically, the earlier we’re involved, the better the outcome is likely to be.

If your cashflow is causing you worry, get in touch, we can help.