Cautious welcome for trade credit insurance scheme

22 April 2009

23 April 2009 | Martha McKenzie-Minifie

Professional groups are cautiously welcoming the £5 billion supply chain insurance pledge in yesterday's Budget.

Under the government scheme, eligible businesses will be able to purchase "top-up" credit insurance cover from 1 May until the end of the year. It can be purchased in respect of reductions in cover that have occurred since 1 April.

CIPS chief executive Simon Sperryn said in a statement yesterday the organisation believed the initiative was crucial for the wider business environment. "The importance of supply chains cannot be overplayed for companies of all sizes: like a deck of cards, knocking out one supplier can bring the whole supply chain down, wreaking havoc and creating devastating results," he said.

But he added a note of caution. "It's extremely disappointing for those which have had their credit insurance either withdrawn entirely or have had their support significantly reduced before 1 April. Even strong businesses will be suffering."

Nick Starling, the Association of British Insurers' director of general insurance and health, said: "In ensuring that healthy companies will get extra support, the government has not tried to second-guess the judgement of insurers."

SMapr2009

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