The Government’s Trade Credit Reinsurance Scheme is now operational – the Government now have State Aid clearance and insurers have signed up to deliver the scheme. The scheme will:
Provide temporary support to businesses through trade credit insurers in the form of a reinsurance ar- rangement to mitigate the economic impacts of Covid-19 on trade credit coverage. The scheme will be back dated to 1 April and run until 31 December.
See the Government reinsure 90% of insurance claims up to a cap of £3bn total industry insurer losses and 100% of claims between £3bn and £10bn of total insurer losses.
Put a number of restrictions on insurers meaning they can only withdraw cover where the justification for doing so is not related to Covid-19 economic impacts, to avoid large-scale or bulk withdrawals of cover.
If a business has had cover withdrawn, they should first look to their existing provider to reinstate cover.
Alternatively, if the existing provider is unwilling to reinstate cover or the insurer is not participating in the scheme, they should look to alternative providers who should be able to provide cover.
While the scheme is intended to address the impacts of Covid-19 on the coverage a business can receive, insurers may still look to withdraw/limit cover. If a business believes they have had cover incorrectly with- drawn, they should look to get this cover reinstated. Please let us know of any issues and we will raise these with Government.