With the news full of headlines about a global supply chain crisis, rising costs, resource scarcity and changing consumer habits, the outlook for businesses remains challenging.

Author: Colin Cunningham


In recent weeks some big names have come under pressure, most notably a fashion company appointed administrators in May 2022. At the time the company had cited ‘supply chain costs, rising inflation, and “softening” consumer confidence in an increasingly tough market’. Company collapses such as these can begin a domino effect as problems travel further through supply networks. Following this, several other companies, all of whom supply to the fashion company, warned they were also at risk due to outstanding payments from them.

Whilst the fashion company in question was saved after being acquired by another business, the risk of insolvency remains for many other businesses in the UK this year. Recent Government research states that the number of registered company insolvencies is on the rise with 1,991 registered in April 2022 – more than double that registered in April the previous year1.

With all fiscal support provided through the pandemic from the Government now ended and a slowing economic recovery being exacerbated by other global events, there is an expectation that there will be a sustained increase in insolvencies. A recent report from trade credit insurer, Atradius, forecasts a 33% increase in global insolvencies this year2.

Protecting your business

It’s more important than ever for businesses to consider the question; “could your business survive the event of non-payment on a significant invoice?” and in doing so, protect themselves against the potential ‘domino effect’ of late payments and customer insolvency. Trade credit insurance can be an effective solution to protect your business against a debt from customers failing to pay for goods or services provided to them on a credit basis, which often happens in an insolvency situation.

Trade credit insurance can also be used tactically to facilitate business growth into new markets and with new customers and suppliers. You may be able to offer higher credit limits to customers and give your own suppliers more confidence in your business because it is less likely for you to default on a payment to them as a result of cash flow problems caused by the knock-on effect of non-payment to you.

How Gallagher can help

Gallagher’s Trade Credit team can help you determine an appropriate credit insurance solution for your business. You may wish to protect;

  • your whole turnover
  • specific key accounts
  • a single customer
  • a single invoice

You can have the flexibility to pick and choose individual invoices you want to insure—we can provide single invoice insurance for invoices up to £500,000 through one of our specialist trade credit insurance partners.

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