Marsh’s Trade Credit Report 2025 discusses the UK’s trade credit landscape in detail.
Why credit insurance adoption is relatively low in professional services
Despite many businesses increasingly exposing themselves to greater risk than they are comfortable with to drive growth, not all opt for trade credit insurance. Marsh research found that only 62% of professional services firms hold trade credit insurance. This adoption rate is notably lower than in other sectors, with 80% of manufacturing firms, 70% of life science firms, and 66% of technology firms buying coverage.
Two key factors contribute to the relatively low uptake of trade credit cover among professional services companies.
1. Limited awareness of trade credit insurance: Our survey revealed that 44% of professional services firms are only somewhat familiar with credit insurance and its benefits. Trade credit insurance remains an overlooked asset within the sector, with many businesses not prioritising this coverage as part of their growth strategy.
2. Funding facilities are prioritised over insurance: Many professional services companies focus on sourcing funding facilities — the loans obtained by using trade debtors (outstanding customer invoices) as collateral — instead of insurance. Essentially, businesses borrow money based on the value of the payments they expect to receive from their clients. This allows them to access cash quickly without waiting for customers to pay. For many professional service companies that use trade debtors, these facilities represent the largest asset on their balance sheets.
How professional services firms can benefit from a trade credit policy
Trade credit insurance is delivering positive business outcomes across multiple industries in the UK, and the professional services and business sector stands to benefit in the same way. The benefits of trade credit insurance for professional services companies include:
Supports business growth: Trade credit insurance enables professional service firms to extend credit terms without fearing catastrophic losses, thereby facilitating growth and expansion. It provides a cushion against widespread payment failures, helping to maintain stability in uncertain times.
Covers debt collection costs: Many trade credit insurance policies include coverage for debt collection expenses. In 70% of debt collection cases within professional services firms, companies rely on third parties to manage the process, which involves chasing late payments, negotiating repayment plans, and escalating legal action if necessary.
This reliance is significantly higher than in other sectors, such as manufacturing (52%), construction (58%), and food and beverage (46%). The high dependence on external agencies increases the financial risk and burden, especially as collection costs rise. For the companies surveyed by Marsh, debt collection costs average £368,400 per year, with nearly all finance directors reporting that these costs are increasing.
Provides creditworthiness assessments of potential clients: Insurers provide creditworthiness evaluations of prospective clients, which, together with a firm’s own risk assessment checks, reduce the chance of entering into contracts with high-risk customers.
Facilitates negotiations with funding providers: The cover also supports negotiations with funding providers, helping to strengthen essential working capital requirements.
Trade credit insurance: Key to resilience in professional and business services
Professional services companies can maintain robust and up-to-date credit management procedures regardless of whether they have credit insurance. However, our research shows that leaders view trade credit insurance as a vital enabler for stability and growth. Companies without trade credit insurance may be missing out on significant benefits, as those with coverage in our survey reported fewer negative impacts from economic challenges.
In today’s risk environment, an increasing number of insurers offer tailored trade credit policies, particularly for larger businesses. Non-payment insurance provides greater confidence to pursue opportunities in uncertain times, making it a valuable consideration for professional services firms.
