Department for Business, Innovation and Skills
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Changes To Government’s Trade Credit Insurance Top Up Scheme

The Department for Business Innovation and Skills today announced further changes to the Government’s Trade Credit Insurance Top-up Scheme. 

Since 1 May, companies that have had their credit insurance cover reduced have been able to purchase six months top-up cover under the Government Scheme.

After feedback from business, the following three changes will be made to the scheme’s rules today:


  • The price of the top-up cover will be reduced from 2% to 1%
  • The £20,000 lower limit on top-up cover will be removed
  • The upper limit on top-up cover will be increased from £1 million to £2 million


Since launching the scheme, the Government has collected market information from insurers, brokers and businesses that use trade credit insurance. Evidence indicates that businesses are adapting to reductions in their insurance by managing their credit risks more actively, thereby reducing their dependence on the product.

However businesses that have not been eligible for this scheme also need the opportunity to adjust to reductions in their trade credit insurance cover. Today’s changes will allow more businesses to benefit from this extra breathing space so that they can adapt to their new circumstances in the longer term.

Notes to editors

1.      The scheme, which runs until 31 December 2009, is a short-term intervention that allows suppliers to purchase Government-backed insurance to either restore cover to the original level or double the amount they are able to obtain from the private sector up to the value of £2m (whichever is the lower).

2.      Trade credit insurance contracts provide suppliers insurance against the risk of a buyer defaulting on their payment for goods after a period of credit. The product helps give suppliers confidence to extend sometimes lengthy payment terms to their buyers. It also gives banks the security to provide working capital facilities. By offering suppliers protection against financial loss, trade credit insurance is sometimes used to support provision of financing products such as loans, invoice discounting and factoring services. Reduction or withdrawal of credit insurance can therefore lead to financial pressure on both buyers (as suppliers may wish to shorten payment terms) and on suppliers (due to its interaction with other financial products).

4.      Four credit insurers (Euler Hermes, Atradius, Coface and HCC) are offering the scheme to their eligible clients. Eligible businesses should apply for the scheme through their credit insurance provider.

3.      Where a business has seen a reduction in its credit insurance since 1 October 2008, the scheme will now offer six months top-up cover at a price of 1%. The lower limit of £20,000 has been removed and the upper limit of £1 million has been increased to £2 million. In June, the Government changed the scheme’s rules to backdate eligibility to include suppliers who had their trade credit insurance cover reduced since 1 October last year.

5.      In 2008 credit insurance firms insured over £300bn of turnover, covering over 14,000 UK clients in transactions with over 250,000 UK businesses.

6.      To apply or for further information companies should contact their trade credit insurer. Further information is also available through Business Link at

7.      On Tuesday April 21, the Association of British Insurers released a Statement of Principles outlining the standards of service customers can expect from their insurance provider. All insurers offering the Government top-up scheme are required to have signed up to the Statement. The Statement can be found at the following URL:

The Department for Business, Innovation and Skills (BIS)

is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.


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