No Time for Risk: Why Credit Insurance and Top-Up Limits Are Indispensable Now
The number of corporate bankruptcies in Germany continues to rise—and with it, the risk for companies of being left with unpaid receivables. But how can you protect yourself? And what should you do if your primary insurer doesn’t provide full coverage? An overview of the current situation and practical solutions.
Current Insolvency Trends: Risks Are Rising
Germany has been in a prolonged recession since 2023, with several factors weighing on the economy simultaneously. High inflation and interest rates are dampening investment, while energy prices remain high. Geopolitical uncertainties are also straining supply chains, and the global decline in demand—particularly from China—is further exacerbating the situation.
Sectors such as the automotive industry and its suppliers are particularly hard hit, as they grapple with high investment costs for the transition to electric mobility, declining production, and uncertain supply contracts. The steel and metal industry is suffering from high energy prices, cheap imports from China, and the costs of “green steel.” In the construction sector, declining revenue, rising financing costs, and postponed projects are shaping the landscape. Even sectors that have been stable until now—such as pharmaceuticals, chemicals, and food—are feeling the effects.
According to an article in the ZEIT , 1,776 insolvencies involving sole proprietorships and corporations were recorded in April 2026—a three percent increase from March and a ten percent increase compared to the same month last year. This is the highest level in 20 years.
Early Warning Signs: When Action Is Needed
Financial difficulties are often preceded by clear warning signs. For example, declining revenue and losses, rising debt, or failure to meet covenants can indicate potential problems. Changes in leadership, high management turnover, delayed audits, or the absence of liquidity plans are also warning signs that should not be ignored.
Risk Mitigation: Credit Insurance and On-Top Limits as a Solution
In times of rising insolvencies and bad debts, credit insurance is a key tool for protecting outstanding receivables. But what if the primary insurer does not fully cover the desired limit amount, but instead issues only a partial decision? 
A top-up limit can help in this situation. It offers two options: Either the top-up limit is applied by the primary insurer at a different premium rate, or it is placed with a third-party provider, so that two separate policies with different providers cover the remaining liability.
The experts at GFL will help you analyze your portfolio and find the right solution for your specific needs. Thanks to our long-standing relationships with various providers and our knowledge of their individual pricing structures, we’ll find the best coverage for you.
