Bad Debt Case Study

Fashion Nation (UK) Limited were a manufacturer of women’s clothing who owed our client a large debt in unpaid invoices.

On 14 May 2020 our client confirmed that the debtor had announced that their office would be closed and payments suspended due to Covid-19. Our client’s insurance policy included debt collection services for insured debt as part of the policy cover. We assisted our client by reporting Fashion Nation (UK) Limited to the insurer as an overdue debt and the insurer began their debt collection process. In the Covid-19 environment the insurer was sensitive to the debtor’s position and tried to work with them to implement a repayment plan. By 10 June 2020 an acceptable repayment plan or commitment to pay had still not been provided by the debtor. The insurer made further attempts to negotiate a repayment plan, but by 24 July 2020 they were left with no choice but to propose commencement of legal action. However, our client received a liquidation notice on 13 August 2020. Their proof of debt was provided urgently to the liquidator and we worked swiftly with our client and the insurer to provide the invoices, proof of delivery and other documentation required for the complex claim assessment. The assessment was completed by the insurer and the claim was agreed in full on 29 September 2020.

Trade credit insurance protects businesses against fluctuations in cash flow caused by bad debts, but a vital part of this process is fast and efficient claims settlement. As a specialist broker our team has the expertise and knowledge to assist our clients to gather the documentation needed for insurers to settle claims quickly.

Post Date | 28/10/2020
Post Author | Hannah Lyon-Wall