Credit insurance company Atradius has launched two policies designed specifically top help small companies protect themselves against the risk of bad credit.
Department of Trade and Industry figures showed that 15,000 UK businesses failed during 2003, the majority of which were small companies with cash flow problems caused by late and non-payment, said Atradius.
Its new products can help firms recoup their losses if their customers are declared insolvent or cannot pay their invoices, the company said.
Atradius said the two policies were good for small businesses and new companies in their early trading years. The Insolvency Policy is a credit insurance policy that gives protection against non-payment by UK debtors whose businesses have failed.
The First Risks Policy covers both payment defaults and insolvencies by UK and foreign buyers in mature OECD markets. Both offer instant decisions on credit limits through an uncomplicated online service.
The company said the policies had been specifically designed for small business with a turnover of up to £2m.
Atradius UK & Ireland director Jon Lindsay said: “Credit insurance has been an important tool for lots of big businesses for many years, but this is the first time that smaller companies have been able to benefit from its protection and peace of mind.
“Business failures are likely to increase this year, especially in the manufacturing and construction sectors, and that could have a knock-on effect on other companies.
"For smaller businesses the impact of a bad debt from a customer can be devastating, so credit insurance can play a vital part in a safeguarding a company's future.
He added: “These new policies mean that our range of products now covers all sizes of business, to help as many different companies and trading circumstances as possible. Which policy is most appropriate will depend on the type and amount of cover required.
