The latest company insolvency figures1 available in England and Wales show that the number of company insolvencies actually decreased in Q3 2020, compared to the previous quarter and the same period in 2019. This reduction is partly driven by Government financial support measures put into place during the pandemic, which have enabled many businesses to continue to survive. When Government support is withdrawn, many of these organisations may find themselves in difficulties.
In a survey conducted by Gallagher2 63% of businesses said they were expecting an increase in bad debts, with 28% anticipating that supplier insolvencies could be a major threat to their business. With well-known names like the Arcadia Group3 and Debenhams4 having gone into administration, many organisations will be looking for additional protection even when trading with companies where they have long-standing relationships.
Businesses who are currently in good shape may be vulnerable to the ‘domino effect’ where a customer fails to pay due to insolvency, leading the supplier at risk of their business also failing. Trade credit insurance helps protect you against customers failing to pay for goods or services provided on a credit basis, and provides reassurance when trading in these challenging times.
Gallagher has a specialist Trade Credit team that can find a solution for your business, and also offers single invoice credit insurance in partnership with Nimbla. Our online platform is simple to use, and you can obtain a credit opinion on any customer before proceeding to the quote process. Cover can be purchased for invoice(s) up to a maximum of £110k per invoice or £500k per customer. This cover is for insolvency only and lasts for 12 months after the due date of your invoice.
Visit www.nimbla.com/ajg to find out more.
1. https://www.gov.uk/government/collections/company-insolvency-statistics-releases
2. https://www.ajg.com/uk/news-and-insights/2020/august/impact-of-covid-19-on-uk-businesses/
3. https://www.bbc.co.uk/news/business-55139369
4. https://www.theguardian.com/business/2020/dec/01/debenhams-close-stores-jobs-department-store-jd-sports
