Counterparty risk, a major part of credit risk, has become more important during the COVID-19 pandemic due to economic challenges faced by many parties. The article discusses the concept of counterparty risk, its relation to credit risk, changes in credit quality, and offers a framework for managing counterparty risk. Data suggests a higher likelihood of increased counterparty risk, especially in energy and finance sectors. Effective counterparty risk management is crucial for all organizations, even if it may involve higher monitoring costs.