FDF to tackle credit insurance dilemma

The Food and Drink Federation (FDF) is in talks with the Confederation of British Industry (CBI) over concerns that insurance companies are suddenly withdrawing or changing policies that cover tens of thousands of companies.

The food industry insures against credit loss by taking out policies to protect against customers that defer or default on payments. But, according to insurance broker Aon Consulting, the number of credit insurance claims has gone up by over 50% in the last three months and insurance companies are no longer in a position to continue their existing levels of cover.

The FDF said that it had opened talks with the CBI to find a solution.

"The FDF is very concerned that insurers are starting to scale back on available credit insurance limits," said a spokeswoman. "This is worrying for suppliers, in particular small and medium enterprises, since it leaves them exposed in terms of their trading relationships."