The Government has announced that the Trade Credit Reinsurance Scheme which ran from July 2020 will close on 30 June 2021 as planned. Last year specialist contractors faced significant insurance premium increases as insurers left the market.
The Scheme, delivered through a reinsurance agreement, offered temporary support to businesses through trade credit insurers. It intended to minimise the reduction in economic activity from the abrupt withdrawal of trade credit insurance (TCI) by ensuring that insurers maintain a consistent level of cover for businesses operating across the UK during the COVID-19 pandemic.
The announcement stated that now is the right time to wind down the scheme following the continued success of the vaccine rollout, the positive outlook for economic recovery in 2021 and the success of the Scheme in maintaining cover in the credit insurance markets.
The expectation is that following the end of the scheme the vast majority of businesses will see their insurance cover being maintained. Government and insurers have communicated that they will continue to collaborate and review the ongoing operation of the TCI market following the schemes closure.
The Construction Leadership Council said in a statement: “Construction businesses should continue to proactively engage with brokers and insurers when seeking TCI, this should include consideration to both current and future business plans for recovery and growth.”
Existing CLC guidance on TCI can be found here and will be reviewed in due course.
The Government announcement can be found here