Trade credit insurance claims soar

The number of claims for trade credit insurance soared in the first quarter of 2009, according to the Association of British Insurers (ABI).

Latest figures from the ABI show that the number of claims totalled 9,213 in the first three months of this year – up from the 6,225 recorded in the first quarter of 2008.

The total value of claims also rocketed, increasing by 166% to a record £316 million.

Nick Starling, the ABI's director of general insurance and health, said: ‘The substantial increase in both the number of claims received by trade credit insurers and the cost of those claims shows that trade credit insurers are continuing to support businesses, especially small enterprises, through the recession.’

Last month the Government backdated the eligibility criteria for the £5 billion scheme to allow more businesses to benefit from the initiative.

Under its original terms, companies who have had their cover reduced since April this year have been able to purchase six months of top-up cover. However, following feedback from business groups, eligibility has now been extended to include firms whose cover has been reduced since 1 October 2008.

The scheme is scheduled to run until 31 December 2009.