2009-08-03

By Editor, CIR

Susan Ross, director of Aon Trade Credit, is calling for government to increase its credit insurance cover to £10-15m and not based on multiples of an existing credit limit to revitalise UK domestic trade.

"The government's once promising top-up credit insurance scheme has failed to attract a significant take up due to £1m credit limits that are only suitable for smaller businesses. While ironically, as most SMEs are private companies without financials available for insurers to assess their credit worthiness, cover is being cut rather reduced. This means there is no cover in the first place for the government scheme to top up.

"The government can breathe new life into the scheme and really support UK business by following in the French government's footsteps and allowing cover to be bought without existing credit limits, albeit at an enhanced price," said Ross.

"Ideally increasing the credit limits to £10-15 million, this would enable larger companies to purchase cover and obtain much needed finance. This would particularly support the advertising, automotive and consumer electronics sectors where distributors would be left with bad debt in the event of a customer going insolvent."

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