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Don’t Get Caught Off Guard: How Trade Credit Insurance Can Safeguard Your Future

3 Minute Read
Written by Greg Kowaliw
20 Febuary 2024

St Hilliers Contracting, established in 1998, experienced rapid growth between 2021 and 2023. However, despite operational expansion, financial reports revealed concerning losses in 2022 and 2023.

While some insurers had recognised this risk early, other insurers were still approving limits up to the week before St Hilliers entered voluntary administration. On the 4th of February 2024,  NCI’s total limit coverage was to the sum of $9,157,500 for almost 47 clients. This indicates that there were no signs of failure up until they entered external administration.

On February 5th, 2024, St Hilliers entered voluntary administration, leaving unsecured creditors facing millions in unpaid debts, posing a significant financial threat to businesses that had outstanding invoices with the company.

The NCI Claims Department began to get an influx of claims following the announcement of the administration. During the first 24 hours, claims for three clients totalling over $225,000 were processed, protecting them from financial losses associated with St Hilliers’ insolvency.

Many more followed during the next few days. NCI’s efficient claims processing ensured prompt financial support for its clients during this challenging period.

Key Takeaways:

Unsecured creditors, with debts undoubtably totalling into the millions, will be left with substantial losses, which could have been avoided with a Trade Credit Insurance policy in place.
Recognising potential risks and taking preventative measures, such as adjusting credit limits, can significantly lessen the impact of a customer’s insolvency.

A customer’s rapid growth should not necessarily be taken at face value. Proper credit assessment involves looking into all aspects of a business’s financial performance.

This case study reinforces the importance of Trade Credit Insurance in protecting businesses from bad debts and ensuring financial stability, especially in dynamic market conditions.

Efficient claims processing plays a crucial role in minimising financial disruption for businesses affected by a customer’s insolvency.

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