According to Begbies Traynor partner Nick Hood, the inability to get insurance is bound to lead to a rise in insolvencies. He said: ‘Companies will have to stop trading because they cannot get insurance.’
Jamie Smith, business recovery partner at Deloitte & Touche added the substantial increase in insurance was due to problems insurance companiesthemselves were having because of the difficulties in the economy.
The British Insurance Brokers Association, warned that business sectors where staff are at a high risk of exposure, could close down because they are unable to get employees liability cover.
The BIBA also said companies in sectors such as construction, courierand mining are either going out of business or operating illegally withoutinsurance because of the problem.
Experts believe that in the current economic climate, the rise in premiumsalone would be enough to drive weaker companies out of business.
Jeremy Willmont of Moore Stephens said: ‘If the cost is substantial, it could be the final nail in the coffin for companies that are struggling.’
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children