A likely downturn in the UK economy is set to bring boom times for the credit insurance sector, as firms seek to protect themselves against bad debts.
Research from BDO Stoy Hayward's Industry Watch predicted that some 16,360 businesses will crash this year - an increase of 3% on 2004.
It stated that this figure will rise 5% to 17,236 next year. BDO said the retail and leisure sectors will be hit hardest.
Trevor Byrne, marketing manager of credit insurer Coface UK, said: "This report does not surprise - it is consistent with the feedback we are getting."
He added recent high profile failures, such as Allders, were affecting market confidence but at the same time, provided a strong message to buy credit cover.
"It's a competitive market right now and a good time to buy as credit insurers will take a more cautious view if there are more business failures," Byrne said.
