Trade Credit Market in Flux Amid Pandemic
The economic turmoil created by the COVID-19 pandemic is profoundly impacting the trade credit insurance market, as supply chains are disrupted and businesses struggle to remain solvent.
Trade credit insurance, which covers an estimated $600 billion in U.S. business transactions annually, protects sellers against buyers' nonpayment of debt, up to a percentage that can be as much as 95% of the biII. There are cancelable and noncancelable forms of coverage.
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“The ones that were hit first were the ones that were in the most precarious position,” while as the downturn continues, it “can impact a broader array of folks,” said John Gibbons, vice chairman of the insurance recovery practice group at Blank Rome LLP in Washington.
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“Trade Credit Market in Flux Amid Pandemic,” by Judy Greenwald was published in Business Insurance on July 13, 2020.