24 February, 2018 - 22:56 By News Desk

Don’t get caught up in a Carillion-style fall out

The recent demise of contracting giant Carillion is a pertinent reminder of why credit risks should be insured, says Laurence Hill, credit insurance specialist at Cambridge-based S-Tech Insurance Brokers.

One of the most important and largest business assets for any company will be its debts. However, businesses often aren’t insured against this risk.
With only £31 million-worth of Carillion’s £1 billion debts insured – according to figures released by the Association of British Insurers – numerous businesses will face tough times in the months ahead.

Some may even struggle to stay afloat. It’s a harsh reminder of how destructive the consequences of insolvency can be. 

Many companies perceive that they are trading with a ‘safe’ customer but are unaware of the risks further up the chain. 

A main contractor’s insolvency can often result in numerous levels below being affected, with the insolvency of sub-contractors an unfortunate and inevitable consequence.

Coupled with political and economic uncertainties, which continue to dominate the landscape, insurers are fearful that insolvencies will rise in all sectors in coming years. 

The latter part of 2017 saw the demise of Monarch Airlines, Palmer & Harvey McLane (the UK’s fifth largest private company), Multiyork, Feather & Black and Just For Pets, as well as a Company Voluntary Arrangement (CVA) for Toys ‘R’ Us. As such, now is a good time to invest in credit insurance to protect your cashflow.

With access to a broad range of insurers and schemes underwritten by industry leaders, Atradius and QBE, S-Tech is able to offer protection to its clients.

Whether you’re seeking protection for single or multiple customers, we can discuss and review your requirements. We can also cater for extended payment terms, arrange cover for self-billing trades, as well as applications for payment & retention payments. 

Some credit insurers also provide a free or contributory debt collection and legal service for those customers that don’t go bust, but from which it’s difficult to extract payment.

In a constantly changing economic climate, it’s wise to consider the options available to help protect your business. 

Credit insurance gives business owners peace of mind, allowing them to focus on running their business without the added worry and stress of their customers’ financial well-being.

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