Ireland's Small Firms' Association (SFA) is lobbying the Irish government to launch an official action group for its cash-stricken members.
SFA director Patrick Delaney said many of its members who took Independent's employers' liability (EL) and personal liability (PL) cover now faced financial ruin.
“We have spoken to the Irish trade minister, Noel Tracey, to ask whether a government-appointed official can work directly with the UK liquidators. EL premiums in Ireland rose by 40% last year and now we have some small holdings exposed by over £1m due to the costs of finding new insurance policies,” he said.
Independent would not take anything less than IR£10,000 (£8,000) as a minimum premium according to Delaney, forcing many companies to over-stretch themselves.
“Independent underwrote more than IR£102m (£81.8m) EL and PL policies in the past two years. It could take up to five years for the whole thing to be cleared,” he said.
In a meeting between the Policyholders' Protection Board (PPB) and the British Insurance Brokers' Association (Biba), the PPB said it would not cover legal defence costs and “corporate bodies are not automatically entitled to any protection under the 1975 Act” in respect of costs.
Biba chairman Mike Williams, said: “It will cost the insureds, but no one knows by how much. The liquidators don't know what the final indebtedness of Independent is going to be and no one knows how many EL claims are outstanding. Hundreds of thousands if not millions of pounds could be spent.”