Whilst insolvencies in the UK remain high, they are no longer at the heightened levels experienced post-pandemic as government support ended. Instead, new threats are emerging in supply chains which are often unpredictable with no warning signs. Businesses are increasingly under pressure to demonstrate their due diligence in their supply chain and show they are taking the necessary steps to protect themselves from third-party risk. This was highlighted in Gallagher's Business Risk Index research in 2025, where supply chain risk was identified as a top 10 concern for UK businesses.
Events such as cyberattacks, geopolitical disruptions, and natural disasters can wreak havoc on supply chains, causing financial losses and operational delays. For example, a recent cyber incident in the manufacturing sector has had a widespread impact throughout their supply chain. Research conducted by the West Midlands Chambers of Commerce highlighted nearly half of all respondents 'faced serious financial repercussions'1.
How trade credit insurance addresses broader supply chain risks
Trade credit insurance can help provide protection against a broader range of supply chain disruptions, helping businesses build resilience in an unpredictable environment. While these risks may not directly involve customer insolvency. Such disruptions can still significantly affect cash flow and a company's ability to meet its financial obligations.
Protection against payment delays caused by cyber attacks
Cyber-attacks on customers or suppliers can disrupt their operations, delaying payments or deliveries and/or services. For example, if a ransomware attack disables a customer's systems, they may be unable to process payments on time. Trade credit insurance can support by providing cover against financial loss caused by such delays, helping a business maintain its cash flow.
Additionally, some trade credit insurance policies can be tailored to include coverage for losses resulting from cyber incidents, adding an extra layer of protection in today's digital landscape.
Mitigating risks from geopolitical events
Geopolitical tensions, such as trade wars or sanctions, can disrupt supply chains and lead to non-payment by customers in affected regions. Trade credit insurance can provide coverage for losses arising from such events, enabling businesses to navigate geopolitical uncertainties with greater confidence.
Resilience against business interruption
Your suppliers or customers business can be interrupted for a number of reasons; a cyberattack, weather related events like flooding, or property damage from a fire which could result in a default on payments. Trade credit insurance helps to protect the insured business by providing compensation for such losses, reducing the financial impact of the initial event on the supply chain.
Benefits of trade credit insurance in a complex risk landscape
By addressing a wide range of supply chain risks, trade credit insurance offers several key benefits:
- Financial stability: Maintain steady cash flow, even in the face of unexpected disruptions
- Enhanced credit management: Provides insights into the financial health of customers and suppliers, helping businesses make informed decisions
- Business continuity: Minimises the impact of supply chain disruptions, enabling businesses to maintain operations and meet their obligations
- Facilitates growth: Enables businesses to explore new markets and partnerships with confidence
As supply chain become increasingly complex and vulnerable, trade credit insurance is no longer just about protecting against customer insolvency. Its role has evolved to address a broader spectrum of risks.
Partnering with Gallagher
Partnering with the right insurance broker will help equip your business with effective ways to manage credit risk. As one of the largest trade credit insurance brokers in the UK, we have a team of highly skilled and experienced specialists who understand the complexities of the market. With strong relationships with a wide range of reputable UK and global trade credit insurers, we can work with you to design a customised solution that aligns with your risk appetite and business objectives.
