Policies are being delayed by up to three months as underwriters continue to shun binding authorities, according to Holman Insurance Brokers.

Since the 11 September tragedy, insurers have been increasingly reluctant to allow intermediaries to write business on their behalf. This is due to a shortage of capacity and so that underwriters may have more control over what is being insured.

Holman's chief executive said last year Lloyd's had approximately a dozen liability binding authorities. The agreements have at least 2,000 polices each and roughly half have now been cancelled.

"If you set up a binding authority in the last couple of years then it is likely to be pulled," said Andrew Holman.

He said intermediaries were now being forced to place risks on an individual basis instead of automatically insuring them on an underwriter's behalf.

"In extreme cases this would take another three months," he said. "It means there is that much more business being placed on the open market facultatively.

"This clogs up the whole system and it also delays everything else, as underwriters have to see everything now. It makes it more expensive too."

He said binding authorities represented "another market for brokers", particularly for niche risks like scaffolder's insurance.

"Brokers are struggling," he said. "More binders are under the microscope and, if they are having bad performances this year, the chances are they will be cancelled."

Holman added although binding authorities are likely to return in a soft market, underwriters will continue to be "very restrictive" until the cycle turns.