Industry fund starts bailing out victims

More than 40 policyholders of Independent Insurance who have been able to plead cases of hardship have become the first to receive payouts from the insurance compensation body.

The Policyholders Protection Board (PPB) said yesterday it had distributed £400,000 to 44 policyholders. The clients were unable to make claims from Independent Insurance itself because the company went into liquidation last month.

A PPB spokeswoman said: "Claims are flowing in every day but we have looked at hardship cases first, for example, those whose roof has blown off and their builders are threatening to stop work because they have not been paid."

Independent Insurance's provisional liquidator, PricewaterhouseCoopers, believes the company has about 600,000 policyholders. Those with non-urgent claims may have to wait a year before seeing any money.

The PPB is committed to pay all private individuals' claims made on policies that are required to be taken out by law. The PPB will cover 90 per cent of non-compulsory policies. Only a small number of companies with Independent Insurance policies are covered by the PPB. They must line up with other creditors to win compensation.