Also, doubled the amount per company it intends to underwrite in the third revision since the scheme's launch on 1 May
The UK Government has cut the price of its £5 billion credit insurance guarantee scheme and doubled the amount per company it intends to underwrite in the third revision, since the scheme’s launch on May 1- reported Telegraph.co.uk.
Only 52 companies have gained from £1.1m of cover. Criticism by the Association of British Insurers over the cost of the guarantee is thought to have prompted the latest change.
The guarantee would cost 1% rather than 2% of the amount of business to be covered on top of the premium charged by the credit insurer. A lower limit of £20,000 has been abolished and the upper limit raised from £1m to £2m.
The scheme is intended to tackle the reduction in insurance cover against business customer non-payment and runs until the end of the year. At first, it extended to companies that had seen their policies reduced since the start of April. This was backdated to cover withdrawn since October 2008 in June.
A Department for Business, Innovation & Skills, spokesman, said: This top up scheme is providing temporary help for businesses as they re-adjust to changed conditions – our evidence indicates that the majority of businesses are now managing their credit risks actively, reducing their dependence on trade credit insurance, as quoted in the newspaper.