Government plans to develop a state-backed temporary reinsurance scheme to provide trade credit insurance for businesses impacted by the coronavirus pandemic have been backed by the Association of British Insurers.

The government scheme would mirror action already taken in some other European countries and in Canada in the face of increasing bad debt in the supply chain. It is hoped that it will allow businesses to continue to access cover against the risk of supply chain insolvencies.

Director of general insurance policy at the ABI, James Dalton if it is developed in the right way, the scheme will help businesses and their supply chains get back on their feet and will give reassurance to the thousands of businesses who rely on the security that trade credit insurance cover provides.

"The scheme could help protect the supply chain, safeguard jobs and kick start the economy, boosting business confidence as we begin to emerge from the dark shadow of COVID-19," he explained. "The priority now is to urgently work through with the Government how this scheme will operate in practice so that it can support businesses through the difficult trading environment, now and in the months ahead."

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