The Association of British Insurers has commented on trade credit insurance cover for the British steel manufacturing industry.
Ross Penstone-Smith, Policy Adviser for General Insurance, ABI, said:
"With some of the biggest names in steel manufacturing in the UK facing an uncertain future, trade credit insurers are continuing to support the industry, providing more than £4.5 billion worth of cover on credit for firms supplying to UK steel manufacturers.
"These recent problems remind businesses of the need to protect themselves against the financial risks associated with trading. Trade credit insurance plays a vital role for British business in reducing the financial risk of supplying to steel manufacturers."
What is trade credit insurance?
Trade credit insurance provides cover for businesses if their customers that owe money for products and services do not pay their debts, or pay them later than the payment terms dictate. This insurance protects businesses against commercial risks that are beyond their control and helps them to grow by minimising the financial implications of sudden or unexpected customer insolvency. Credit insurance gives businesses the confidence to extend credit to new customers and improves access to bank funding, often at more competitive rates. Trade credit insurance is for products and services that are due within 12 months.