Around £150 million was paid in trade credit insurance claims in 2015, an increase of 41% compared to the previous year.
The Association of British Insurers (ABI) found that almost £36 million was paid to small businesses due to late payment or customer insolvency.
Trade credit insurance provides cover for businesses if their customers pay late or fail to pay.
ABI findings show:
- 4,400 claims were made by small businesses, accounting for 40% of total claims made to trade credit insurers
- 7,000 trade credit insurance policies were taken out by SMEs in 2015, nearly 60% of policies sold.
Mark Shepherd, ABI manager for general insurance, said:
“Trade credit insurance is crucial for all businesses to help them navigate potential risks. In particular, SMEs looking to grow can have confidence that a trade credit insurance policy will help them to do this whilst guarding against the unexpected.”