ABI Association of British Insurers : USC gives notice to appoint receivers: ABI comments on latest in a row of business failures of household names

Today's announcement that USC intends to go into administration, along with the recent insolvencies of CityLink and Bank Fashion, highlights the need for businesses to protect against their customers going into administration.

Commenting on the latest in a row of business failures of household names, Huw Evans, Deputy Director General at the ABI, said:

"January can be a tough time for business and this year is no different. Today's announcement that USC intends to appoint receivers is hot on the heels of recent announcements that CityLink and Bank Fashion have gone into administration. These latest insolvencies provide a stark reminder about the vital role trade credit insurers play in protecting their customers from the financial stress of sudden or unexpected insolvency.

"Credit insurers are providing cover for millions of pounds worth of goods and services supplied on credit to these companies. Without this insurance in place, many more companies would be starting 2015 with large financial losses and potentially many more job losses.

"Credit insurance gives businesses the confidence to extend credit to companies they are trading with and improves access to bank funding, while at the same time forming part of a company's risk management plan in helping them to navigate potential risks."

What is trade credit insurance?

Trade credit insurance protects businesses against commercial risks that is beyond their control and helps a business to grow by minimizing the risk of sudden or unexpected customer insolvency. Credit insurance gives businesses the confidence to extend credit to new customers and improves access to bank funding, often at more competitive rates. Trade credit insurance is for short-term account receivables - i.e. those due within 12 months.