Insurance companies have estimated that £30m will be paid out in claims by companies owed money by the liquidated contractor giant Carillion, according to BBC News.
Claims for between £5,000 and several million pounds have been submitted to insurers by supplier firms with trade credit insurance, which provides coverage against unpaid debts.
Carillion’s collapse saw 30,000 creditors and a £1.5bn debt balance. Many creditors have warned that they may become insolvent as a result. The company’s debts included a £900m debt backlog and £600m pension deficit.
Mark Shephard of the Association of British Insurers said: “One insolvency can risk a domino effect to hundreds of firms in the supply chain.”
Small businesses are owed an average of £141,000 by the liquidated contractor, including building, engineering, and electrical firms. The typical debt owed to medium-sized businesses with 50 to 250 employees is £236,000, while large firms are owed an average of £15m.
Carillion’s operations in cleaning, catering and other routine works is continuing and many of its private sector work is recommencing under alternative arrangements. The company’s collapse is the latest in a series of high-profile liquidations, including Monarch Airlines, Multiyork furniture retailer and tobacco supplier Palmer & Harvey.