Thousands of construction and warehousing companies in Southwest England are facing financial disaster as a result of Independent Insurance's provisional liqui-dation.
The region's biggest broker, John Lampier & Son, warned the insurer's collapse had left "thousands of firms without cover and tens of thousands of pounds out of pocket".
The crisis includes one Bath company with a £100,000 debt, after Independent failed to finalise its public liability legal case before its liquidation.
Lampier sales and marketing director, Nigel Richardson, said many clients had to find premiums of up to £50,000 for the second time in a year, while others could not find a company to insure them.
"They've paid out substantial sums for insurance cover they'll never get and then some have paid out again at a much higher rate or been refused covers altogether," Richardson said.
"Those firms without any insurance cover are in serious danger, because fire, theft or a public liability claim could cause financial ruin.
"Each day brings new horror stories of firms that are owed huge sums on previous claims or that have been stretched to the limit with a second batch of premiums.
"Scariest of all, though, are the firms that come to us having been unable to find insurance cover at all – the risk is huge."
Richardson said AXA took most of Lampier's risks "to help us out", but said he expected the insurer to keep 60% or less at renewal.
"We've already replaced some of it at Lloyd's with the underwriter, but if someone comes to us off the street, the market is closing because they've filled their books at Lloyd's and have no capacity left," he said.
The managing director of the Bath printing industry supplier who was left with a £100,000 legal debt said he had been a long-time customer of Independent.
His company had a dispute with a customer more than five years ago, which Independent settled out of court.
However, it was unable to agree the third-party legal costs and was still in negotiations when it collapsed.
The managing director said the legal costs, having lost two months of premium paid to Independent, then paying 40% more for new insurance had hit his 18-year-old company hard.
"We won't have that £100,000 to grow the company," he said.
"But most people in our situation have little or no choice at all."