TTF chief executive John White said the launch comes at a time when UK business failures were at their highest level for eight years and the need for credit risk protection was “acute”.

TTJ understands that market conditions, including rising prices and a squeeze on customers’ margins, have led several timber companies who have previously not had credit insurance to now consider taking out policies.

Now the TTF has teamed up with Aon Trade Credit and Credit Indemnity & Financial Services to provide credit insurance specifically designed for the timber sector.

“Our industry is particularly susceptible to interest rate volatility,” said Mr White. “Rates are now at a six-year high of 5.75%, which is impacting stockholding and outstanding debtor costs.

“Combined with stock purchasing constraints and spiralling fuel prices, the industry is confronted with an uncertan market outlook.”

This, he said, meant timber traders faced a growing threat to their balance sheet from company failures and slower payments.

One agent told TTJ that underwriters were getting more and more nervous at a time when more cover was needed in the trade. “Business failures must come,” he said. “I am surprised we have not seen more.”

“There is product inflation effecting every single aspect of timber trading,” said Pat Burke, Arnold Laver’s group purchasing director. “It is a serious issue and credit insurance will be very significant this year and next year.”