The value of Credit Insurance was thrust into the spotlight recently when we helped a client avoid being dragged into the abyss through no fault of their own. Our client, who supplies ready mixed concrete, unfortunately, suffered a bad debt of £169k and reported it to us on the 10th of October. About two weeks later we had secured a payout of £127,035, and they were also able to reclaim £28k in VAT. So, whilst our client is still £14k out of pocket, that’s a country mile from the original potential loss they were looking at, and the consequences of such a loss to the business.
The back story to this saga makes for an interesting cautionary tale.
The client came to us midterm having been with their insurer, direct. They’d had no prior training and lacked any meaningful understanding of the policy they had in place. Overall, they’d had nearly £200k of claims rejected in the previous 12 months, leaving them very tight on cash flow. But in addition to the financial impact, the emotional damage caused by the stress of trying to work through this situation, can’t be overlooked. Having taken out a policy directly with the insurer, the company directors were in a state of considerable regret as they were clearly left very open to rejected claims.
When we took over the policy in February 2023, our priorities were to fully train the client’s staff on requirements and reporting responsibilities, along with setting about increasing the cover levels. Since that time, we have had four claims successfully paid out, the largest being this most recent incident whereby a customer had become insolvent and had begun the process of closing down.
Recognising the gravity of the situation, our Credit Director, Corran Barnes, took it upon himself to collect all the relevant information from the client. Others in the team set about chasing the insolvency practitioner for confirmation of debt, which can often slow the process down. We engaged the Senior Claims Manager to make them aware of the importance and perils of this claim. Despite managing other claims for other clients on the same debtor, the Senior Claims Manager managed to have it assessed within 24 hours.
We still needed the proof of debt and chased three times a day for confirmation, until this was eventually received on the 19th. We got this to the claims team and were again on the phone to push for a quick payout. Settlement was agreed on the 25th of October and paid out on the 26th. The debtor formally published its intentions for insolvency on the 27th of October; the day after our claim was paid.
Had our client not had Credit Insurance or been with such a proactive broker who understands the insurance process, or the tenacity in owning and wanting to resolve a client’s situation, the outcome would have been catastrophic.
Our client would have been filing for their own insolvency this week, leaving 32 people out of work just before Christmas and in an ongoing cost-of-living crisis. Working closely with the directors, the stress they were under was palpable. We were very much key in averting the worst possible outcome for the business.
Corran Barnes, Credit Director at C&C says: “Credit Insurance is a discretionary product, so a discretionary spend only comes into value when you come to claim on it. As a specialist broker, we act as the liaison between the insurer and client, so we manage the process to ensure a swift as possible conclusion and bring reassurance to our clients. I’m very proud of how our team responded to this challenge, and their proactive attitude in concluding this claim in what can be considered record time, for a claim of this size. We pride ourselves on getting the right outcome for the client. In this instance, the right outcome was saving a company from demise due to the failure of another.”
Our client had this to say about us: “C&C has been brilliant since taking over our insurance provision. In addition to securing more appropriate cover, they’ve also helped to educate key people here on how to minimise and manage claims scenarios. The credit insurance that C&C arranged for us, has been nothing short of a lifeline in this last claim incident. We can’t thank them enough for their diligence, support and leadership in handling this case.”
