BusinessCompany NewsBudget to unveil supply-chain insurance plan – report

Budget to unveil supply-chain insurance plan - report

Credit insurance scheme for small and medium-sized businesses will be announced in next week's Budget, according to a report.

A state guarantee scheme to underpin vital supply-chain insurance is set to
be announced by Chancellor Alistair Darling in next week’s Budget, according to
government insiders, the Financial Times reported.

The credit insurance scheme will form a centrepiece of the Budget initiatives
to help small to medium-sized businesses cope with the recession, the FT said.
Its unveiling marks the culmination of months of negotiations with insurers
spearheaded by Lord Mandelson, the business secretary, the paper said.

The initiative is in response to a sharp reduction in credit insurance, which
protects companies that supply goods on credit against the risk that they will
not be paid.
The scarcity of credit insurance could threaten hundreds of supply chains,
according to the FT.

The government scheme is expected to offer guarantees for companies that have
seen their cover reduced but not withdrawn.

In January Accountancy Age revealed that Euler Hermes, the UK’s
largest trade credit insurer, had restricted the terms of its cover, saying the
move would help customers weather the recession.

Further reading:

Budget
to unveil supply-chain insurance plan

Euler
Hermes hits back as credit row escalates

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