Receivers believe that the construction side of Carillion had liabilities of almost £7bn when they failed and went into liquidation in January. Construction News has reported that the official receiver has estimated Carillion’s liabilities were £6,905,532,000. The information was revealed in reports written about the 27 businesses that are currently in liquidation. We were obviously expecting a large figure for the liabilities due to the size of the group, but the early estimations seem huge.
Winner with credit insurance
The Construction Enquirer has reported that credit insurance has saved Prater from large losses and potential destabilisation. The firm said it expected to avoid any bad debt from Carillion’s collapse due to the claims paid under their credit insurance policy. This resulted in pre-tax profits being up 3% at £5.8 million. Prater is a roofing, cladding and curtain wall specialist and recently opened an office in Manchester.
Prater’s managing director, Gavin Hamblett, said that the expanded offices demonstrated Prater’s ongoing commitment to opportunities arising outside of London and the South East.
He said: “With a permanent base, we are now able to better position our knowledgeable and experienced teams, allowing them to remain inconsistent and close contact with our regional clients, helping to encourage our collaborative ethos throughout the UK.”
Over the year the firm’s employee base increased to nearly 390 staff after securing work at landmark projects at Manchester Airport, Woking town centre, Wood Wharf, the Royal Albert Docks in east London, Waterloo Station and Hinkley Point C.
It would appear Prater has more than benefited from credit insurance to maintain their impressive growth. In these volatile times for business, Prater has the reassurance that the company can withstand the collapse of other businesses and knows that claims will be paid.
The importance of Credit Insurance
The above example shows the importance of trade credit insurance and The Association of British Insurers (ABI) are still concerned that many companies trade without it. The ABI released the latest trade credit insurance figures which show pay-outs to be at the highest level since 2009. Claims paid to businesses due to non-payment of debts last year reached £225 million, or the equivalent of £4.3 million on a weekly basis, an increase of 7% since 2016.
“The expertise of trade credit insurers is helping firms navigate challenging trading conditions, enabling them to expand at home and overseas, so helping Britain thrive,” said Mark Shepherd, ABI assistant director, property, commercial, and specialist lines. “With the number of policies rising and insured trade at a record high, more firms are recognising that this cover is an essential business tool to help them assess the credit risk of potential business partners.” He continued, “But too many firms remain unprotected, and with intermediaries selling the vast majority of these policies, we need to raise awareness of the importance of trade credit insurance.”