Trade credit insurance top-up scheme
Trade credit insurance top-up scheme
Eligible businesses can purchase additional 'top-up' credit insurance cover under the government's Trade Credit Insurance Top-up scheme (TCITS). The scheme is a short-term measure to provide real help to businesses, in the current economic climate, whose credit insurance cover has been reduced by their provider.
Recent changes
The premium for purchases of 'top-up' cover under the scheme has been reduced to 1 per cent of the value of the cover.
- The minimum threshold of £20,000 for purchases of 'top-up' cover has been removed.
- The upper limit has been raised to £2 million.
- Eligibility for the scheme is backdated to include those companies who had their credit limits reduced on or after 1 October 2008.
- An additional credit insurance provider - HCC International Insurance Company PLC - joined the scheme in June 2009.
- Up to 28 days' retrospective cover can be purchased in circumstances where a business requires continuity of cover from a partial reduction made by insurers in the previous 28 days.
Background on the TCITS - how does the scheme work?
The TCITS is open to eligible businesses trading in the UK, with a trade credit insurance whole-turnover policy. If your credit limit is reduced you can purchase top-up cover via your existing credit insurance provider, who will administer the scheme on the government's behalf.
For queries, complaints, or to apply for the scheme, please contact your current credit insurance provider.
Key features of the TCITS:
- It is open to new applicants until 31 December 2009.
- It can be purchased in respect to reductions in cover that have occurred since 1 October 2008, with cover under the scheme back-dated to start from when the reduction took place.
- The duration of each policy - written under the scheme - is for a maximum of six months.
- The value of cover you receive is determined by the level of cover provided by your underlying policy. If the level of your underlying policy changes during the six month period then the level of top-up cover will also change accordingly.
- You can buy more than one policy - each policy bought under the government scheme covers your relationship with one buyer.
Download full details on the trade credit insurance scheme (PDF, 123K) - Opens in a new window.
Eligibility for the scheme
- Top-up cover is available if you hold a whole-turnover trade credit insurance policy
- Your trades are within the UK with payment terms of no more than 120 days
- The level of cover being compared to was in place for at least 30 days
- Your cover was reduced on, or after, 1 October 2008
- The reduction in cover was triggered by the credit insurance provider
- This scheme does not cover exports
Please also note that:
- top up cover is available if you hold a whole-turnover trade credit insurance policy
- this scheme does not cover exports
Level of cover provided by the scheme
You can buy insurance to the value of the lower of the following amounts:
- the amount equal to the level of cover now offered under your credit insurance policy
- the amount which restores the level of cover to the amount you had previously
- £1 million
For example, if cover provided by your underlying policy is reduced from £100,000 to £80,000 then you can buy top-up cover of £20,000 to restore cover to the original level of £100,000. If cover is reduced from £100,000 to £30,000 then you can buy top-up cover of £30,000, matching that of your underlying policy, giving you total cover of £60,000.
Top-up insurance is purchased as a six month policy at a price of one per cent of the value of the cover.
Note: The trade credit insurance top-up scheme does not cover businesses where cover has been completely withdrawn by the credit insurance provider, unless it is partially reinstated and the other eligibility criteria apply
Download full details on the trade credit insurance scheme (PDF, 123K) - Opens in a new window.
Providers
Trade credit insurance providers who are currently operating the government top-up scheme are:
- Atradius Credit Insurance N.V - Opens in a new window
- Coface S.A - Opens in a new window
- Euler Hermes UK PLC - Opens in a new window
- HCC International Insurance Company PLC - Opens in a new window
It is likely that other credit insurance providers will join the government top-up scheme in due course.
Background on trade credit insurance
Trade credit insurance covers businesses against the risk of bad debt due to the insolvency or protracted default of their buyers. It can provide a replacement of working capital when bad debts and late payment impact on cashflow.
Other government support
The government has introduced a package of support designed to provide help for businesses through the economic downturn. Find out more about the support offered by the government's Real Help initiative.
Further information
Find your local Business Link through our Contacts Directory.
See our page on specialist insurance in our guide on how to insure your business and assets - general insurances.
Use our interactive tool to work out which forms of insurance you should have for your business.
