Managing director Simon Burgess, a former underwriter at Lloyd’s of London, says he believes B&B workers will not be able to find cover due to the difficulties at the lender.
He says: “British Insurance has stopped giving unemployment cover to B&B staff as we believe there will be substantial job losses in the business. As a direct consequence of that, the company is no longer insurable. Unfortunately, this does not just apply to the fat cats but the ordinary people within the company.
“Anyone in the mortgage market who has not got the necessary cover has left it too late and there is no alternative.”
CBK Colchester principal Peter Chadborn says employees should not be surprised if insurers turn them down.
He says: “Human nature is that people will often put things off until it is too late and people should not be surprised if insurers say they do not want to take this risk. It is like someone going to the doctor, receiving some bad news and wanting to take out a life or criti- cal-illness policy.”
Chadborn says insurers should take steps to warn customers in advance if they are not going to offer cover.
Brentchase Financial Services mortgage specialist Mike Fitzgerald says Burgess’s comments are “a bit short-sighted”.
Fitzgerald says: “Mortgage brokers do things other than mortgages. Of course, the purchase side has slowed right down but we have got so many strings to our bow that we will just turn our attention to other areas.”
A B&B spokeswoman says: “We are not aware of any members of staff having issues with servicing their personal finance needs.”