How Trade Credit Insurance Saved a Business from Bankruptcy

In the unpredictable world of construction, financial stability can be as fragile as the buildings you’re working on. Quasar Constructions demonstrated this when they went into administration, owing over $60 million with only $6 million in assets. But here’s the twist: their downfall nearly sent a number of their suppliers into bankruptcy as well — until their trade credit insurance saved the day.

The Crisis

When Quasar went under, they left an $800,000 debt hanging over one of their suppliers. For this mid-sized company, that amount represented a huge chunk of their receivables, and would have resulted in them failing too.

The Role of Trade Credit Insurance

Luckily, this supplier had a trade credit insurance policy in place. That policy did exactly what it’s supposed to do, covering them in case clients like Quasar couldn’t pay up.

The Claim Process

Once Quasar entered administration, the supplier quickly filed a claim with their insurer. The insurance policy covered the majority of the debt— and they will recover more than $700,000 out of the $800,000 owed.

The Outcome

It secured the cash flow they needed to keep their business running and avoid the domino effect of Quasar’s collapse. As the supplier’s General Manager put it, “Without that insurance, we’d be gone too.”

Conclusion

This case shows just how crucial trade credit insurance can be, especially in industries like construction where financial risks are high. For businesses, TCI isn’t just an option—it’s a lifeline. It helps you keep your balance when a major client’s financial troubles threaten your own stability.

At Capital Trade Credit Solutions, we specialize in making sure businesses are protected with the right trade credit insurance. Let us help you find the right coverage, so you’re ready for whatever comes your way. Don’t wait until it’s too late—reach out today and secure your business’s future.