March 21, 2026
Most businesses operate on credit terms. Goods are delivered, projects completed, or services provided before payment is received.
In many cases this works smoothly. But when a customer cannot or will not pay, the consequences can be serious.
Bad debts can:
- Disrupt cash flow
- Force businesses to absorb unexpected losses
- Delay investment or growth plans
- Create pressure throughout the supply chain
For smaller firms that rely on a handful of key clients, just one major unpaid invoice can have a significant financial impact.
Trade credit insurance is designed to protect businesses from this risk by covering losses caused by customer insolvency or prolonged non-payment.
In this guide, we explain how trade credit insurance works, what it can cover, and why more businesses are considering it as part of their financial protection strategy.
Why insolvency and late payment still threaten businesses
Business insolvency remains a significant concern across many sectors of the UK economy.
According to The Insolvency Service, 3,933 construction companies entered insolvency in the 12 months to September 2025, accounting for around 17 percent of all UK insolvencies.
This makes construction one of the sectors most exposed to financial instability.
However, the problem isn’t limited to one industry. Late payment and insolvency affect businesses of all sizes and in all sectors, putting pressure on working capital.
The failure of one company can create a ripple effect, causing financial strain for multiple businesses further down the supply chain.
Trade credit insurance provides a safety net against this risk, helping businesses protect revenue and maintain financial stability when customers fail to pay.
What is trade credit insurance and how does it protect your business?
Trade credit insurance protects businesses against losses caused by unpaid customer invoices.
Instead of carrying the financial risk of bad debt alone, the business transfers that risk to an insurer. If a customer becomes insolvent or fails to pay within an agreed period, the policy can compensate the business for the insured portion of the debt.
This protection helps companies continue trading without absorbing the full financial impact of customer default.
Trade credit insurance is commonly used by businesses that:
- Supply goods or services on credit terms
- Rely on a small number of key clients
- Operate in sectors with higher insolvency exposure
- Trade internationally
What does trade credit insurance cover?
Trade credit insurance policies can be structured in different ways depending on how a business operates and where its main credit risks sit.
Common types of cover include:
Whole turnover cover
Protection across most or all of a company’s customer accounts.
Selective accounts or single contract cover
Protection focused on specific customers or large contracts where exposure is higher.
Domestic and export cover
Policies can cover customers based in the UK as well as overseas buyers.
Political risk cover
Protection against political or economic events that may prevent payment in international trade.
Top-up credit limits
Additional cover where higher credit exposure exists with a particular customer.
Some policies also include credit monitoring and debt recovery services, helping businesses assess the financial strength of customers and respond quickly if payment risks increase.
Trade credit insurance is commonly used by businesses in sectors such as construction, manufacturing, recruitment, wholesale, engineering and international trade, where trading on credit terms is standard practice.
How trade credit insurance can aid business growth as well as protect it
Trade credit insurance is not just about recovering money when something goes wrong. When used effectively, it can also support confident and sustainable business growth.
Many policies include access to credit monitoring and financial intelligence services, providing insights into the financial health of customers. This can help businesses identify potential risks earlier and make more informed decisions when offering credit terms.
These tools allow companies to:
- Make more informed decisions when extending credit
- Identify signs of financial difficulty earlier
- Offer competitive credit terms with greater confidence
- Build stronger trading relationships with customers
- Protect cash flow stability as the business grows
Having insurance in place for customer debts can also make lenders more comfortable when a business is applying for funding.
Used strategically, trade credit insurance becomes more than just a safety net. It becomes a commercial tool that helps businesses win, retain and safely grow customer relationships while reducing the financial impact of bad debt.
Access to specialist trade credit insurance expertise
As part of the Jensten Group, Robert Gerrard has access to specialist brokers who focus specifically on trade credit insurance.
These experts understand the complexities of credit risk, debtor protection and sector-specific exposures. Their knowledge helps businesses assess where financial vulnerabilities may exist within their customer base.
Through this network we can help businesses:
- Assess the risk profile of their customer accounts
- Structure appropriate trade credit insurance solutions
- Access specialist underwriting markets
- Protect revenue and cash flow
By combining Robert Gerrard’s client knowledge with Jensten’s specialist expertise, businesses can benefit from tailored advice designed to support confident and secure trading.
When should you review your exposure to bad debt?
Certain situations can increase exposure to bad debt risk. As your business grows, customer credit exposure will usually grow with it.
It may be time to review your position and consider trade credit insurance if your business:
- Relies heavily on a small number of major customers
- Offers extended payment terms to clients
- Operates in sectors where insolvency rates are higher
- Trades internationally or with unfamiliar customers
- Has previously experienced late payment or unpaid invoices
Protecting your company from unpaid invoices can be considered just as important as protecting buildings, equipment or vehicles.
Looking to protect your business from unpaid debt?
Trade credit insurance provides a practical way to safeguard revenue, protect cash flow and give businesses greater confidence when trading on credit terms.
Whether you already have trade credit insurance and want to check it still meets your needs, or you’re exploring cover for the first time, Team RG is here to help.
Remember: at Robert Gerrard, we go beyond broking — we’re your risk advisers. That means we don’t simply recommend policies. We take time to understand the credit risks most relevant to your business and tailor cover to meet your unique needs.
If you would like to protect your business against the threat of unpaid debts, get in touch with Team RG today.
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Most businesses operate on credit terms. Goods are delivered, projects completed, or services provided before payment is received.
In many cases this works smoothly. But when a customer cannot or will not pay, the consequences can be serious.
Bad debts can:
- Disrupt cash flow
- Force businesses to absorb unexpected losses
- Delay investment or growth plans
- Create pressure throughout the supply chain
For smaller firms that rely on a handful of key clients, just one major unpaid invoice can have a significant financial impact.
Trade credit insurance is designed to protect businesses from this risk by covering losses caused by customer insolvency or prolonged non-payment.
In this guide, we explain how trade credit insurance works, what it can cover, and why more businesses are considering it as part of their financial protection strategy.
Why insolvency and late payment still threaten businesses
Business insolvency remains a significant concern across many sectors of the UK economy.
According to The Insolvency Service, 3,933 construction companies entered insolvency in the 12 months to September 2025, accounting for around 17 percent of all UK insolvencies.
This makes construction one of the sectors most exposed to financial instability.
However, the problem isn’t limited to one industry. Late payment and insolvency affect businesses of all sizes and in all sectors, putting pressure on working capital.
The failure of one company can create a ripple effect, causing financial strain for multiple businesses further down the supply chain.
Trade credit insurance provides a safety net against this risk, helping businesses protect revenue and maintain financial stability when customers fail to pay.
What is trade credit insurance and how does it protect your business?
Trade credit insurance protects businesses against losses caused by unpaid customer invoices.
Instead of carrying the financial risk of bad debt alone, the business transfers that risk to an insurer. If a customer becomes insolvent or fails to pay within an agreed period, the policy can compensate the business for the insured portion of the debt.
This protection helps companies continue trading without absorbing the full financial impact of customer default.
Trade credit insurance is commonly used by businesses that:
- Supply goods or services on credit terms
- Rely on a small number of key clients
- Operate in sectors with higher insolvency exposure
- Trade internationally
What does trade credit insurance cover?
Trade credit insurance policies can be structured in different ways depending on how a business operates and where its main credit risks sit.
Common types of cover include:
Whole turnover cover
Protection across most or all of a company’s customer accounts.
Selective accounts or single contract cover
Protection focused on specific customers or large contracts where exposure is higher.
Domestic and export cover
Policies can cover customers based in the UK as well as overseas buyers.
Political risk cover
Protection against political or economic events that may prevent payment in international trade.
Top-up credit limits
Additional cover where higher credit exposure exists with a particular customer.
Some policies also include credit monitoring and debt recovery services, helping businesses assess the financial strength of customers and respond quickly if payment risks increase.
Trade credit insurance is commonly used by businesses in sectors such as construction, manufacturing, recruitment, wholesale, engineering and international trade, where trading on credit terms is standard practice.
How trade credit insurance can aid business growth as well as protect it
Trade credit insurance is not just about recovering money when something goes wrong. When used effectively, it can also support confident and sustainable business growth.
Many policies include access to credit monitoring and financial intelligence services, providing insights into the financial health of customers. This can help businesses identify potential risks earlier and make more informed decisions when offering credit terms.
These tools allow companies to:
- Make more informed decisions when extending credit
- Identify signs of financial difficulty earlier
- Offer competitive credit terms with greater confidence
- Build stronger trading relationships with customers
- Protect cash flow stability as the business grows
Having insurance in place for customer debts can also make lenders more comfortable when a business is applying for funding.
Used strategically, trade credit insurance becomes more than just a safety net. It becomes a commercial tool that helps businesses win, retain and safely grow customer relationships while reducing the financial impact of bad debt.
Access to specialist trade credit insurance expertise
As part of the Jensten Group, Robert Gerrard has access to specialist brokers who focus specifically on trade credit insurance.
These experts understand the complexities of credit risk, debtor protection and sector-specific exposures. Their knowledge helps businesses assess where financial vulnerabilities may exist within their customer base.
Through this network we can help businesses:
- Assess the risk profile of their customer accounts
- Structure appropriate trade credit insurance solutions
- Access specialist underwriting markets
- Protect revenue and cash flow
By combining Robert Gerrard’s client knowledge with Jensten’s specialist expertise, businesses can benefit from tailored advice designed to support confident and secure trading.
When should you review your exposure to bad debt?
Certain situations can increase exposure to bad debt risk. As your business grows, customer credit exposure will usually grow with it.
It may be time to review your position and consider trade credit insurance if your business:
- Relies heavily on a small number of major customers
- Offers extended payment terms to clients
- Operates in sectors where insolvency rates are higher
- Trades internationally or with unfamiliar customers
- Has previously experienced late payment or unpaid invoices
Protecting your company from unpaid invoices can be considered just as important as protecting buildings, equipment or vehicles.
Looking to protect your business from unpaid debt?
Trade credit insurance provides a practical way to safeguard revenue, protect cash flow and give businesses greater confidence when trading on credit terms.
Whether you already have trade credit insurance and want to check it still meets your needs, or you’re exploring cover for the first time, Team RG is here to help.
Remember: at Robert Gerrard, we go beyond broking — we’re your risk advisers. That means we don’t simply recommend policies. We take time to understand the credit risks most relevant to your business and tailor cover to meet your unique needs.
If you would like to protect your business against the threat of unpaid debts, get in touch with Team RG today.