A source from a leading insurance broker said the implications of the collapse for construction could be devastating, and the National Federation of Builders said it had received reports that two firms faced ruin.
Major contractors that have suffered losses include Carillion, Bovis Lend Lease, Mansell, Miller, Amec, Allen and Balfour Beatty. Allen said the collapse had cost it £800,000 and Carillion said it had lost £200,000. Mansell reported costs running into hundreds of thousands. Other contractors would not give figures but said they were looking for new cover.
Contractors have built up these debts for two reasons: first, they have had to pay out on insurance claims from their own pocket because they have no cover; second, they have had to pay for new premiums.
Richard Hastilow, the RIBA's chief executive, expressed concern for his members. He said most practices had 10-15% of their cover with Independent, but about one in five had relied solely on the firm for insurance.
We have already heard from two firms that had significant policies with Independent that are being hit very, very hard
Barry Stephens, National Federation of Builders
Barry Stephens, deputy chief executive of the NFB, said the Treasury should speed up the distribution of assets to eliminate concern. He said: "We have already heard from two firms that had significant policies with Independent that are being hit very, very hard." He said one firm had been due to receive a £50,000 cheque a week before the collapse as part of a claim but had not received it.
Stephen Rawlinson, an analyst with Peel Hunt, said the collapse would affect everyone, but he rejected claims that large companies would collapse.
Personal policy holders will have most claims paid by the policy holders' protection board, but corporate customers are only entitled to make claims for compulsory insurance, such as employer liability.