Credit Insurance Top-up Scheme

Overview:

Announced in April 2009, the Government first introduced a Trade Credit Insurance Top-Up Scheme to enable businesses that operate a Whole Turnover Credit Insurance policy to purchase additional cover where they have seen cover reduced on a specific buyer.  The Scheme has since been improved in June and again in August 2009.

How Does the Scheme Work?

The scheme is designed to work alongside your current Trade Credit policy, and is open to all businesses trading with UK customers.  Each Top-Up policy purchased will run strictly for a six- month period from the date when your original credit limit was reduced under your Credit Insurance policy.

Key Features:

• The scheme is open to new applicants until 31st December 2009.
• It can be purchased where reductions have occurred since 1st October 2008 and can incept at a date of your choice.  
• There is no longer any minimum level of top-up cover you can buy (previously £20,000), however, there is still no top-up cover available on Nil limits.
• Should your Credit Insurer reduce a credit limit to Nil while Top-Up cover is in place within the first three months of cover, the top-up cover is also automatically removed and you may be eligible for a partial refund. There is no refund available if cover is removed after three months.
• You can purchase Top-Up policies on multiple buyers.  Each policy purchased covers your trading with a specific buyer.

Eligibility:

• Your payment terms with each buyer do not exceed 120 days.
• The original level of cover was in place for at least 30 days prior to its reduction.
• Cover was reduced on or after 1st October 2008.
• The reduction in cover was reduced by your Credit Insurance underwriter – and not at your own request.
• Cover is available if you hold a Credit Insurance policy with an underwriter participating in the scheme.
• The scheme does not cover exports.
• NOTE – THE TRADE CREDIT TOP-UP SCHEME DOES NOT COVER BUSINESSSES WHERE COVER HAS BEEN REDUCED TO NIL BY YOUR CREDIT INSURANCE UNDERWRITER. SHOULD COVER BE REINSTATED TO A LOWER LEVEL THAN YOU ORIGINALLY HAD, YOU COULD BE ELIGIBLE FOR SOME COVER UNDER THE SCHEME.

 Levels of Cover Available (cover available is the lesser of the following amounts):

• Equal to the level of cover now offered under your Credit Insurance Policy.
• The amount restores the level of cover you previously had prior to reduction.
• Maximum Top-Up cover available - £2 million.

Scheme Costs:

• The cost of your six-month Top-Up policy will be calculated at 1% of the level of cover provided under the scheme at the time of joining, levied by the government and invoiced by the Credit Insurer.
• There will be a policy charge from your Credit Insurer which will be detailed separately and which is non-refundable.
• There will be a UK Credit Administration Fee of £50 per application which is non-refundable.

Trade Credit Policy Renewal:

The Top-Up scheme is directly linked to your underlying Credit Insurance policy.  If your underlying policy expires, the Top-Up policy will also expire.  If your Credit Insurance policy renews with your existing Credit Insurance underwriter, the Top-Up cover will continue through to the expiry of the six-month period.

If you change Credit Insurer, provided your new Insurer has signed up to offer the scheme your Top-Up cover will remain in place and your new insurer will take on the administration of the Top-Up policy for the remainder of its term.  If you're new Credit Insurer has not signed up to offer the government scheme, your Top-Up policy will expire.

Claims:

Claims will be assessed by your current Credit Insurance underwriter who will manage the claim on behalf of the Government.  Cover under the Top-Up scheme falls in line with your underlying Credit Insurance policy.   If non-compliance invalidates your underlying claim, your Top-Up claim will also be invalidated.  Any excess applied to your underlying Credit Insurance policy will also apply to your Top-Up cover.  As per normal practice, all claims should be submitted via UK Credit in the first instance.

For any additional queries, please contact UK Credit Insurance Ltd