A backlash from brokers and customers has prompted QBE to soften its plan to cut back its trade credit protection cover in response to the coronavirus crisis.

Some 7000 trade credit customers with policy limits up to $US250,000 ($416,526) will have their limits halved, with QBE continuing cover for many businesses that would have had the insurance cut completely under an initial proposal.

About 2000 customers still face their coverage being nilled, but QBE has extended the timeframe for introducing the changes to Wednesday, and an appeal mechanism is in place to allow individual sectors or businesses to seek a review of their situation where there are essential needs.

The insurer is reducing cover by 25% in the $US250,000 ($416,526) to $US1 million ($1.7 million) range, and above that level in high-risk categories it is reducing limits by 50%.

“The current situation is unprecedented and we have made changes to future trade credit coverage to reflect this unique situation,” a spokesman told insuranceNEWS.com.au.

“These changes will allow us the flexibility to provide support to critical industries such as the health care sector, food and transport.”

Changes were initially announced by emails received at the start of last week, taking brokers and customers by surprise and sparking complaints by firms, including construction businesses.

Revisions to the plan were announced later in the week, in conjunction with other measures introduced more widely by the insurance industry to assist SME policyholders.

“We have listened to our customers and understand they need support now and will continue to do so over the coming months,” Asia Pacific CEO Vivek Bhatia said.