Trade Credit Insurance Top-Up Scheme

In the recent Budget it was announced that the Government is to provide a Trade Credit Insurance Top-Up Scheme. The scheme has been developed by the Department for Business Enterprise and Regulatory Reform (BERR) in conjunction with the credit industry.  It is important that we communicate the content of the scheme to you and confirm our role in the administration of it.

The purpose of the scheme is to provide top-up credit insurance cover on a temporary basis for buyers that have had their limits reduced but does not cater for limits that have completely reduced to zero. The temporary cover is designed to allow additional time for buyers to renegotiate trading terms with suppliers and make alternative funding arrangements if necessary.

There are four insurers that have agreed to be involved with the administration of this scheme namely, Euler, Atradius, Coface and HCCI. If your policy is not placed with one of these underwriters then unfortunately you cannot participate in this scheme.

We understand that all premiums are passed across to BERR and the underwriters do not benefit from any premium and moreover, take any risk in this scheme. They will however levy an administration charge and collect insurance premium tax.

There are strict, non-negotiable rules which apply to the scheme and the key elements are set out below for your information:

• Only limits reduced after 1st April 2009 will be covered under the scheme
• You must apply for the top-up cover within 28 calendar days of the limit being reduced however there is an allowance to 31st May 2009 at the start of the scheme for limits reduced between 1st April and 30th April.
• The scheme only applies to domestic buyers.
• You must have a whole turnover policy
• Top period is limited to a period of 6 months from the date that the limit was reduced.
• Minimum application amount is £20k.
• Maximum limit is £1m.
• Commencement date for the scheme is 1st May 2009. Closing date for applications is 31st December 2009.
• Top up amount can not exceed the lesser of the underlying reduced limit or the original limit.
• Premium cost is 2% of the top up limit value plus an insurer administration charge of 0.3% plus i.p.t.
• Rebates and pro-rata premiums are available in certain circumstances.

For further information or a quotation please go to the contact us page.