Case Study 5: Insured Against The Unexpected

Sector | I.T
Turnover | £2M

Even companies in strong and fast growing sectors can face serious non-payment problems. The UK's No 1 independent IBM business partner with offices in Berkshire and Lancashire has had just these problems. After nearly four years of trading smoothly on open credit terms, one of their clients, Connaught Plc – an established FTSE 250 company which once had a market value of over £500m - went bust almost overnight leaving behind £220m of debt. Thankfully, the company was covered.

“As an IBM Business Partner, our client base tends to be made up of businesses of a substantial size. They’re the kind of companies which don’t normally go bust, but when they do it can be pretty painful,” said Peter West, Finance Director. “Connaught was a huge company employing over 10,000 people and investing hundreds of thousands of pounds into their IT systems. No-one expected them to go bust. But stuff like that does happen,” he continued.

After Connaught’s insolvency, CBF quickly organised the payment of a claim, over £50,000. “CBF were very good. They assisted us really well in the claims process, making it as easy as they could. I would be really surprised if we’d have got it any quicker without them” said Peter.

This was the first payment default and the first claim the company had ever had. But as Peter explains, it only takes one loss to cause disastrous consequences: “Some of the invoices we put through are worth hundreds of thousands of pounds, so one big loss could take us down. You just can’t have a situation where the business is at risk – it has to be insured against the unexpected”.

So is a fast claim payment the only reason to use CBF’s services? According to Peter, CBF offers a whole host of benefits: “We’ve always used a broker for credit insurance services. Originally though, we’d spoken to the underwriter directly and got a quote from them - but then we contacted CBF. They actually managed to get us a better price from the same underwriter!” he said. “As well as being professional and providing a decent service, we feel that CBF are on our side – they want to get us the best price and get claims paid for us”.