Insurers have said they will pay more than £30m to businesses owed money by collapsed construction giant Carillion.
Sums from £5,000 to several million pounds are being paid to firms which had insurance policies against bad debts.
However, most of Carillion’s suppliers risk getting little or nothing back, as only a minority of firms had the cover.
The impact of Carillion collapse on suppliers could be devastating as Mark Shepherd at the Association of British Insurers (ABI) explained: “For all businesses, large or small, bad debt could easily put their day-to-day operations at risk, threatening the jobs of their employees. One insolvency can risk a domino effect to hundreds of firms in the supply chain.”
The association said that about £31m will be paid out for trade credit insurance, which covers firms against the risk of not being paid if a company that it does business with collapses.
Carillion, which was the UK’s second biggest construction firm and a major service provider for the government, went into liquidation with a £900m debt pile and £600m pension deficit.
