The Builders Merchants Federation (BMF) has welcomed the government’s decision to guarantee business-to-business transactions currently supported by Trade Credit Insurance, ensuring the majority of insurance coverage will be maintained across the market.
It is particularly important to builders’ merchants, many of whom, have trade credit insurance in place, and the construction industry is one of the largest users of this type of insurance accounting for some 30% of users.
John Newcomb, chief executive officer of the BMF, who chairs the Construction Leadership Council (CLC) Group, which provided data to show the potential impact of a reduction in cover, said: “We are extremely pleased that the government will provide this vital backstop for the construction industry. It will protect thousands of jobs, keep cash flowing and help the building materials supply chain trade with confidence.
“The announcement is particularly welcome on the day that the construction industry is among those being encouraged to return to work in a safe and structured way.”
The Trade Credit Insurance guarantee will be delivered through a temporary reinsurance agreement with insurers currently operating in the market. It is designed to cover COVID-19 economic challenges and will provisionally last until the end of the year.
