Credit insurance giant Euler Hermes has altered its ratings procedure to give retailers and suppliers the chance to challenge any decisions to reduce cover.

Under the new initiative Euler Hermes will give its clients - suppliers and their retailer customers - two weeks’ notice before changing their cover. Previously the insurer altered cover before notifying either supplier or retailer.

During the two-week notice period, suppliers and retailers have the chance to object if they believe cover has been scaled back unfairly.

Euler Hermes UK chief executive Fabrice Desnos told Retail Week: “This gives clients a breathing space to make representations.”

Euler Hermes has launched a helpline for retailers to call if they want to query their level of cover.

Since last year rival credit insurance broker Atradius has been giving its customers 30 days’ notice before altering cover. And another rival, Coface, has also changed its terms, giving customers credit scores for the businesses they supply. Coface ratings can be challenged if they are deemed to be unfair, in order to “nourish dialogue”, according to managing director Xavier Denecker.

Credit insurers came under fire during the recession, criticised for pulling cover and contributing to the demise of some high-profile retailers, including Woolworths.

Desnos said: “Lessons have been learned in the past 18 months. We have recognised the need for transparency and dialogue between the buyers and the insurers.”

Desnos said that conditions are now more stable, adding that the retail sector is no riskier than other sectors, such as construction.

“The crisis we have seen was across all sectors,” he said. “A number of retailers have managed to restructure debt or refinance, so we’re a lot more positive on some.”

But he added: “There are still significant risks with the overall economy. All sectors in retail are going to be difficult, but the middle tier is more exposed.”

Desnos said Government should not intervene in the credit insurance market again, as it did last year with its top-up scheme to help small firms survive the recession.

“The fact that the top-up scheme was not taken up shows there’s not much Government could do without putting lots of taxpayers’ money at risk,” he said.