The scheme ensures that trade credit insurance (TCI) coverage and credit limits are maintained during the coronavirus pandemic, helping businesses to trade with confidence.
Given the disruption to economic activity, reduced cashflow and the resulting increased risks of insolvency and default in the market, businesses have seen TCI withdrawn, premiums rocketing, or the level of cover offered reduced.
In June 2020 the government announced the trade credit reinsurance scheme – a £10bn temporary business support measure to help mitigate the impacts of Covid-19 by offering support to businesses through trade credit insurers. It was initially set to run for six months but has now been extended to the end of June 2021.
Builders Merchant Federation chief executive John Newcomb said: “I currently chair the Construction Leadership Council’s working group on trade credit insurance that, along with the CBI, has been calling for an extension to the Trade Credit Insurance scheme. We also provided detailed evidence from BMF members to support the extension. We are very pleased that the six-month extension has been confirmed, providing the reassurance I know many merchants were looking for as trading through pandemic continues.”
The Construction Leadership Council has provided guidance on the scheme here: www.constructionleadershipcouncil.co.uk/wp-content/uploads/2020/12/20.12.29-CLC-COVID-19-Trade-Credit-Insurance-Guidance-v3.0.pdf