Suppliers to retailers increased their trade credit insurance cover by 17% last year driven by furniture and electronics businesses after the number of retail failures rose, according to insurer Atradius.

The figures showed suppliers to furniture retailers increased their cover by 12% while white goods and consumer electronics suppliers increased cover by 17%.

Businesses supplying logistics and utilities to stores increased their cover by 25%.

Atradius attributed the significant swell in cover to declining confidence in the stability of the high street. The insurer added that the figures “reflect the high levels of support being given to the retail supply chain by Atradius”.

Atradius UK & Ireland director of risk Marc Henstridge said high profile insolvencies have led to retail suppliers re-thinking the amount of risk they are prepared to manage.

He said: “Trade credit insurance does two things – not only paying suppliers if their buyer goes into administration leaving invoices unpaid, but also alerting suppliers  to any signs that their customer may be in trouble. Many of our customers are finding this invaluable in the present climate – particularly small to medium-sized businesses who may lack the internal resource to monitor developments themselves.”

Atradius senior retail underwriter Owen Bassett added: “Retailers have had a tough few years - burgeoning store portfolios as shoppers increasingly switch to online purchasing; Eurozone instability and the impact of austerity on consumer confidence have all taken their toll. Retail casualties were up 6% last year which is bound to shake the faith of suppliers, particularly those to retail chains.

“If a supplier to a chain is servicing several hundred stores, for example they risk losing a  hefty sum. It is basic common sense for suppliers to safeguard their own cash flow from the impact of non-payment by struggling retailers.”

Credit insurers have been blamed in the past for tipping retailers - including Woolworths and Comet - over the edge and into insolvency as suppliers refuse to deal with store groups that they cannot get cover for. Critics have called them retail’s “fair weather friend”.

Henstridge added: “Suppliers have acknowledged that trade credit insurance can help safeguard them. They can no longer run the risk of not getting paid for goods and services should insolvency strike.

“Atradius is currently on cover for over 17,000 UK retailers, representing our largest sector of exposure, around 21% of our overall UK book.  We have also paid out claims totalling £150m in the past three years which has helped 11,000 British businesses continue trading.”