Insurers expect trade credit claims from construction firm collapse
(Reuters) — Insurers expect to pay out £31 million pounds ($44 million) in trade credit claims to suppliers hit by the collapse of British construction and outsourcing firm Carillion P.L.C., the Association of British Insurers said.
Carillion, which built roads and hospitals and ran a host of public services, collapsed on Jan. 15 under the weight of at least £2.2 billion pounds in debt and pension liabilities.
Firms buy trade credit insurance to cover the risk of not being paid for the goods and services they provide, following issues such as an insolvency.
“One insolvency can risk a domino effect to hundreds of firms in the supply chain,” said Mark Shepherd, assistant director at the ABI.
Trade credit insurers paid £210 million pounds to businesses in 2016 for non-payment claims, the ABI said in a statement.
