Last year's bitter feud between Zurich and Folgate is set to be re-ignited with the Towergate Partnership now threatening legal action against the insurer.

The latest spat comes after Zurich UK Commercial sent letters to Towergate clients telling them not to do business with the broker.

Towergate Partnership chief executive Andy Homer said: "We have spoken to our legal advisers over the matter and are now awaiting Zurich's response.

"We are awaiting a full explanation and have not yet received an apology. "

Towergate contacted Zurich last week.

There is a history of bad blood between the two companies which started last year when Zurich Commercial cancelled Folgate's commercial agency. Zurich claimed it was exiting the arrangement via "run off." There followed accusations by Folgate that Zurich was stealing its business.

With the integration of Towergate and Folgate the run-off of Folgate agencies will be completed by August this year with "losses that are not significant," said Homer.

A Zurich spokeswoman played down the current matter saying: "An error occurred due to a misunderstanding over the evolving structure of the Towergate Partnership. This is now being resolved."

Timeline of a struggl

Zurich cancels Folgate's commercial agency amid allegations that the insurer planed to use other brokers to attack Folgate's business. (Inset: How we reported the story on our front page of the 24 June issue)

The row between Zurich and Folgate deepens as Folgate chief executive Andy Homer accuses the insurer of attempting to "steal" the broker's business.

The row between Zurich and Folgate escalates further. The insurer sends letters to some of Folgate's clients naming brokers they can transfer their business to if they wish to continue their relationship with Zurich.