The scheme was introduced to support trading following the initial Covid-19 lockdown and is scheduled to finish at the end of December 2020.
More than 50% of BMF members use some form of trade credit insurance to transact with both customers and suppliers. The government re-insurance scheme – which provided a £10bn guarantee – has helped merchants to access the appropriate level of trade credit insurance to operate their businesses and trade with confidence since it was introduced in May, backdated to 1st April 2020.
Builders Merchants Federation chief executive John Newcomb, who chairs the Construction Leadership Council’s insurance working group, has written to the Department of Business, Energy & Industrial Strategy (BEIS) requesting a six-month extension to the scheme, to the 30th June 2021.
John Newcomb said: “Trade credit insurance is a vitally important part of the construction industry, which ensures the smooth flow of goods and materials throughout the supply chain.
“We were extremely pleased that the government supported it in May. However, we are now experiencing a series of local lockdowns leading to continued uncertainty for the whole construction industry.
“In a survey of companies across the construction industry – many of whom are involved in building materials manufacture and supply – over 54% of respondents believed that without government intervention insurers are unlikely to maintain an appropriate level of cover for their business when the current re-insurance scheme ends.
“An extension to the current scheme beyond the 31st December deadline will support the industry with business confidence and help it through the continued uncertainty of trading throughout the pandemic.”
The BMF expects to hear the government’s decision on extending the trade credit insurance re-insurance scheme by mid-November.