Opinion
Shoring up defences Building greater financial resilience Todd Davison Managing Director Purbeck Insurance Services
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s a business solely focussed on helping small business owners mitigate their financial risks through Personal Guarantee Insurance, Purbeck has been on the front line of the fall-out from COVID-19. The value of Personal Guarantee Insurance has really come to the fore in the last few months and this will remain the case as lockdown eases and the recovery process begins. Part and parcel of cover is mentoring and support services to firms in financial distress. It is as much in our interests to help businesses survive this crisis and indeed future challenges, as it is our clients.
Doubling of PGI enquiries In January, February and March, as the UK watched what was happening in China, Italy and other parts of the world, through the lens of the media and listened to stark warnings from our government, we saw applications for Personal Guarantee Insurance (PGI) double year-on-year. Small businesses were shoring up their defences and this strategy will have to continue as part of the recovery process. At this stage, a number of our customers have seen their business affected adversely although most of these businesses are mitigating these issues by proactive intervention (e.g. utilising the Job Retention Scheme, VAT deferral and payment holidays) to alleviate short-term trading concerns. While our insurance cover is available to businesses at any stage in their growth, our customers are 50 | NACFB
generally running well-established businesses with ten or more years of trading under their belts. The launch of the Trade Credit Insurance guarantee should also mean small businesses (particularly those in the construction and manufacturing sectors) can continue to access affordable insurance to support trading with other businesses and provide confidence within the supply chain. It will be critical for policymakers to work closely with insurers, funders, and businesses for the scheme to work effectively and to promote liquidity within these markets.
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From 1st December this year, HMRC will become a preferred creditor in a business insolvency for certain HMRC debts, moving from sixth position to third in the list of creditors to be paid following a business collapse
