One industry player in the insurance industry says he is seeing increased interest among Canadian businesses in trade credit insurance as firms look to navigate Canada-U.S. trade tensions.

Trade credit insurance is a type of protection for businesses against the risk of non-payment by customers, according to the Business Development Bank of Canada. Andrew Perkins, a senior vice president of NFP’s Trade Credit and Political Risk Insurance practice, said in an interview with BNNBloomberg.ca Thursday he is advising clients to also look at some of the secondary impacts from tariffs that could weigh on margins and pose risks to accounts receivable assets.

He said the trade credit protection program his firm operates protects clients if a customer files for bankruptcy or can’t pay bills due to insolvency reasons, highlighting the importance of accounts receivable assets to provide liquidity to companies.

“We don’t know what the implications of the tariffs are going to be. Companies need to renegotiate their contracts to account for the tariffs. We don’t know who is going to absorb those tariffs, either for products going to the U.S. or…products coming back into Canada,” Perkins said.

“If, through the supply chain, the companies cannot pass that tariff along to their customer or to the end user that creates margin squeeze, they simply aren’t going to make as much money as they would have previously and it’s highly probable that the risk of corporate bankruptcies would increase because of these tariffs.”

As the trade war unfolds, Perkins said he is getting more inquires among customers about trade credit insurance, which he says has not commonly been used in Canada but has in Europe.

“Companies are now contemplating putting that protection in place because they want to protect that account receivable asset,” he said.

Perkins highlighted recent increases in corporate bankruptcies in Canada, saying there is a risk that corporate bankruptcies could further increase because of tariffs.

Figures from the federal government show business insolvencies rose 28.6 per cent in 2024 compared to the previous year.