Keep your business’ income protected as government support ends

Keep your business’ income protected as government support ends

While things are looking up, the fall-out from the COVID-19 pandemic is still being felt by businesses across Australia. For many, the lockdowns and restrictions have had a lasting effect, even months down the line.

The good news is that economic recovery has been better than first thought, according to the Reserve Bank of Australia. This paired with a low unemployment rate has made for improvements Matt Comyn, Chief Executive at Commonwealth Bank, has called “miraculous”.

But the momentum has been fuelled by billions of dollars in state and federal government spending and concerns remain that some parts of the economy may begin to wobble as programs fall away or wind back.

The $90 billion JobKeeper wage subsidy scheme, a critical support measure accessed by many firms to keep staff employed and their businesses ticking over, expired at the end of March. Some temporary insolvency relief measures have also come to an end.

The reduction in assistance has increased the risk that firms previously able to meet financial commitments may no longer be able to do so, and there could be cascading effects on the enterprises with which they engage.

Some analysts say government measures may have kept alive “zombie” firms that otherwise would have ceased trading, and there may in coming months be a surge in companies unable to pay their debts.

Which is where trade credit insurance comes into play. The cover ensures a business can protect itself against the risk of invoices not being paid by those customers facing challenging circumstances and unable to meet obligations.

While often discussed in the global context or for the top end of town, there are a number of trade credit policies designed for smaller firms that include a range of features to mitigate the risk of loss.

Some may provide protection in export or imports contexts, while others deal with local trading. They may require a firm to specify particular debtors, or provide a more general cover. Policies may be triggered by insolvency or a certain period of non-payment.

Whether you have insurance or not, it’s of course important to take appropriate precautions to keep your business protected against risks. But unfortunately, sometimes the unexpected does still happen, so it’s a good idea to have cover that gives you peace of mind for the future.

While challenges inevitably lie ahead, now that some normality has returned, many businesses are starting to feel hopeful for what’s to come. There is still plenty of value in getting suitable cover though, and a broker can help you do just that.

For more information, or if this article has brought up any queries, please don’t hesitate to get in touch with your insurance adviser.


Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.