Ask most people to name a type of business insurance and they'll reach for property, liability or cyber. Trade credit cover, the policy that protects against customers failing to pay, rarely attracts the same attention.
Yet the Association of British Insurers' (ABI) new report, The Value of Commercial Insurance: Enabling growth, innovation, and resilience, points to trade credit cover as one of the quieter mechanisms supporting a UK growth story: DCS Group, the country's leading distributor of household, health and beauty products.
Founded by Denys Shortt in 1994, DCS is headquartered in Banbury and supplies hundreds of retailers and wholesalers across the UK, running its own manufacturing operation alongside its Enliven brand. The business reached £350 million in annual sales in 2024, having passed £300 million the previous year.
For more than a decade, that expansion has run alongside a trade credit policy with Coface, which monitors the creditworthiness of DCS's customers and protects against unpaid invoices if a customer fails through insolvency or protracted default.
It's a relatively small mechanism next to the headline growth numbers, but a structurally important one. A distributor supplying hundreds of customers is, in effect, extending short-term credit to all of them simultaneously. As the business grows, so can the amount sitting in receivables and exposed to customer failure.
It's exactly this kind of exposure that Jonny Carruthers, director at specialist credit and political risk broker BPL, said can remain uninsured.
"Trade receivables can be one of the largest uninsured assets on a company's balance sheet, so there can be significant exposure sitting there," he said.
Part of the challenge for brokers is structural. The team managing a client's credit decisions isn't always the team responsible for purchasing its general insurance.
"Teams managing credit within a business can be different from those purchasing general insurance, for example, so understanding where the decision-making responsibility sits is important," Carruthers said.
Financing of receivables has also become commonplace, he added, bringing banks into the conversation where insurance supports or facilitates funding.
That means identifying the exposure can require brokers to look beyond their usual insurance contacts and understand how a client manages and finances the credit it extends to customers.
Used well, Carruthers argued, the product can do more than protect the balance sheet after a customer fails.
"Trade credit insurance can help businesses navigate both current and future trading risks, while better use of data can support stronger decision-making and help businesses identify more predictable risks," he said.
"The product works best when it sits alongside strong credit management principles within the business but can certainly act as a genuine growth tool."
The more useful conversation may come before there is an obvious problem with a major customer. Carruthers said several years of relatively low claims activity and loss ratios have contributed to competitive pricing and structures, creating favourable conditions for good-quality clients with a strong bad debt record to consider cover. Fraud also complicates any argument for waiting until a problem becomes visible.
"A business can have strong credit analysis and decision-making in place and still suffer an unpredictable bad debt, which is another reason not to wait until there is an obvious concern around a major customer," Carruthers said.
That logic extends to clients that already hold cover. BPL is increasingly speaking to prospective clients that have had trade credit insurance for years without reviewing their insurer or broker relationships and may not realise how the product or market has evolved. It isn't simply about identifying clients with no trade credit cover, but understanding where receivables exposure sits within a business, reaching the people who actually manage it and checking whether existing protection still reflects how the client trades.
DCS shows what that can look like at scale. As a business adds customers and extends more credit, the value exposed to non-payment can grow quietly alongside its sales. It may only become obvious when a customer fails, but the better time to understand that exposure is well before then.
