2009-06-10

By Editor, CIR

The government has agreed to extend its GBP5 billion trade credit insurance scheme to more companies, in response to pressure from business groups.

The top-up scheme was originally open only to companies that had seen their cover reduced since April 1, but business secretary Lord Mandelson agreed to backdate eligibility to October 1 2008.

"The extension of the scheme is necessary, as problems surrounding credit insurance cover became apparent in late 2008," said David Frost, director general of the British Chambers of Commerce.

"For it to be a success however, the availability of the government's intervention needs to be communicated swiftly and efficiently to the businesses that have been affected."

The government programme, which runs to the end of the year, offers suppliers to state-backed insurance to either restore cover up to the original level or double the amount they are able to obtain from the private sector up to the value of GBP1 million, whichever is lower.

According to the Association of British Insurers, trade credit insurance claims in the fourth quarter of 2008 showed an increase of 51% on a year earlier.

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