Insurers to pay out £14.5m following Phones 4U collapse

Trade credit insurers have paid out £14.5m to the suppliers of collapsed mobile phone retailer Phones4U.

Phones 4U entered administration one month ago after its remaining mobile phone operator, EE, cut its ties with the retailer. All 362 stores remain closed.

Its collapse could have left companies which supplied products on credit out of pocket.

However trade credit insurers - which cover the value of goods supplied on credit if the company they are supplying goes bankrupt  - expect to receive and pay claims of £14.5m the  ABI said.

Deputy director general Huw Evans said: “Trade credit insurers keep Britain’s supply chain moving and enable their customers to do business with much greater security than they would have if they were on their own. 

“The all too real example of Phones 4U going into administration shows exactly the reason why so many businesses rely on trade credit insurance to insure the value of goods they are supplying. Trade credit insurance provides the function that enables companies to take calculated risks and the British economy to grow and operate effectively.”