Could a business failure literally take the shirt off your back?
7 Oct 2019

Menswear giant Moss Bros Group plc was the subject of whispers recently when industry pundits suggested the company ‘announced’ that its credit insurance would be cut by insurers. 

Within hours the reports had been pulled from the websites listing the news (links to which appeared in Google’s results) which has created further speculation about how Moss Bros views credit insurance.

If Moss Bros themselves quashed the news, then it indicates the importance they place in credit insurance cover being “seen” to be in place, regardless of which suppliers were actually insured.

Insurers play a vital role here. If they did indeed reduce the level of credit insurance cover then this will have been based on real and accurate knowledge. Insurers need to understand the risks that they are being asked to underwrite, and this may often mean requests for information above and beyond the legal filing requirements. For large companies like Moss Bros this will often mean direct contact from insurers and (confidential) updates from the likes of Moss Bros to those insurers to allow them to maintain cover for insured suppliers.

For small and medium sized companies this may mean requests for full accounts rather than abbreviated or interim/management accounts, forecasts and budgets and, in some cases, meetings directly between credit insurers and the managers of those SMEs to understand strategy and management strength.

Support from credit insurers may well be more important for cash flow than bank facilities. If companies expect to have to give banks full disclosure why not credit insurers? The importance of maintaining the confidence of credit insurers can be critical to any company. So it makes sense that Moss Bros tackled the news as quickly as it did.