Carillion collapse – a lesson too late?

“One of the most important and largest business assets for any company will be its debts,” explains Adrian Cooper, credit insurance specialist at S-Tech Insurance Services, based on the Cambridge Science Park. “However businesses often don’t insure themselves against this risk.”

The recent collapse of Carillion is a harsh reminder of how destructive the consequences of insolvency can be. Leaving debts in the region of £1.5bn in its wake, numerous businesses are facing a tough time ahead; with less than a penny in every pound being repaid to Carillion’s creditors, some may struggle to stay afloat.

“Many companies perceive that they are trading with a ‘safe’ customer but are unaware of the risks further up the chain,” continues Adrian. “A main contractor’s insolvency can often result in numerous levels below being affected, with the insolvency of sub-contractors an unfortunate and inevitable consequence.”

Coupled with political and economic ambiguities, which continue to dominate the landscape, insurers are fearful insolvencies will rise in all sectors in the coming months and years. The latter part of 2017 saw the demise of Monarch Airlines, Palmer & Harvey McLane (the UK’s fifth largest private company), Multiyork, Feather & Black and Just For Pets, as well as a Company Voluntary Arrangement (CVA) for Toys ‘R’ Us.

With access to a wide range of insurers and schemes underwritten by industry leaders, Atradius and QBE, Alan Boswell Group is able to offer protection for its members.

“Whether you’re seeking protection for single or multiple customers we can discuss and review your requirements,” adds Adrian. “We can also cater for extended payment terms, arrange cover for self-billing trades as well as applications for payment & retention payments.

“Some credit insurers also provide a free or contributory debt collection and legal service for those customers that don’t go bust, but from which it’s difficult to extract payment.”

In a constantly changing political and economic time, it’s wise to consider the options available to help protect your business. Credit insurance gives business owners peace of mind, allowing them to get on and run their business without the added worry and stress of their customers’ financial well-being.