The steel sector crisis has turned the spotlight on what suppliers can do to protect themselves, according to an industry expert.
The demise of SSI in Redcar and other leading companies in the steel sector cutting jobs or being on the verge of collapse have had a detrimental knock-on effect for suppliers.
This has raised the question about what supply chain companies can do to protect themselves from falling victim to bad debt.
In the wake of this turmoil in the steel industry, Henderson Insurance Brokers Teesside office is offering companies a free, no obligation review of the potential risks.
Jonathan Willett, a director at Henderson Insurance Brokers Teesside office, said: “There are always consequences when a large business fails. Aside from the obvious social and economic fallout there will be supply chain companies that will fold as a direct and indirect result of SSI’s demise.
“In addition, businesses reliant on the discretionary spending of those who earned a living in Redcar from the steel industry could find themselves under threat.
“Businesses need to look at what they can do to protect themselves to survive the fallout of a major company’s failure.”
Mr Willett advises suppliers to take advice on covering themselves against bad debt by considering credit insurance that is designed to protect a company from a client company’s insolvency, default or failure to pay.
Mr Willett, who is based at Henderson’s office at Westland Way, Preston Farm Business Park, added: “It is essential that to survive and grow, companies need to extend trade credit prudently, protect their position and limit future exposures.”
After suffering a bad debt, businesses can either chase business to replace lost turnover and profits or restrict exposures to minimise risk.
Credit Insurance protects a company’s trade debtor book and underpins and supports existing and new risks.