Monday 2nd June 2025
How Trade Credit can support your business
In the high-stakes world of UK construction, where projects are often capital-intensive and payment terms extend months into the future, securing cash flow is paramount. Trade Credit Insurance (TCI) has emerged as a vital tool for businesses seeking to protect themselves from the crippling impact of customer insolvency.
Put simply, TCI protects a business’s accounts receivable. If a client defaults, whether due to insolvency or non-payment, TCI ensures that a large portion of the owed amount is indemnified. This safety net allows firms to extend credit terms with greater confidence, knowing their revenue stream is insured.
The UK construction industry is particularly exposed to credit risk. Data from the Insolvency Service shows that construction consistently ranks among the top three sectors for business failures. So far during 2025, the construction industry has accounted for 18.1% of all UK insolvencies, and the UK has seen 4,111 construction companies become insolvent in the 12 months to the end of March 2025.The collapse of firms from Carillion to ISG, with debts at hundreds of millions of pounds, have continually sent devastating shockwaves through the industry, highlighting the domino effect one insolvency can have throughout the supply chain.
For SMEs and specialist subcontractors, such events can be catastrophic, wiping out margins and jeopardising future viability. Trade Credit Insurance steps in not only to protect against such losses but also to offer critical insights. Providers like Allianz Trade monitor over 83 million businesses worldwide and deliver real-time risk assessments, empowering firms to make informed decisions about who they trade with.
Beyond protection, TCI can also facilitate growth. Businesses with a credit insurance policy are often viewed more favourably by banks, unlocking better financing terms and improving access to working capital.
In a sector as unpredictable as construction, where project delays, disputes, and insolvencies are part of the landscape, Trade Credit Insurance offers reassurance. It’s more than a policy – it’s a strategic asset.
As a specialist insurance broker with deep experience in construction, we help firms navigate their risks and secure their future. In an industry where one unpaid invoice can break a business, the value of Trade Credit Insurance cannot be overstated.
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Kerry London is authorised and regulated by the Financial Conduct Authority. The company is a leading UK independent and Lloyd’s registered broker, which means that we work with a wide range of niche and major insurers.
This note is not intended to give legal or financial advice, and, accordingly, it should not be relied upon for such or regarded as a comprehensive statement of the law and/or market practice in this area. In preparing this note, we have relied on information sourced from third parties, and we make no claims as to the completeness or accuracy of the information contained herein. You should not act upon information in this bulletin nor determine not to act without first seeking specific legal and/or specialist advice. We and our officers, employees or agents shall not be responsible for any loss whatsoever arising from the recipient’s reliance upon any information we provide herein and exclude liability for the content to the fullest extent permitted by law.
Categories: Construction,
