If you didn't already record the details of your conversations with them do so now (assuming that the undertaking they gave you wasn't in writing?).
They made an undertaking (a contract to provide insurance) on which you relied when you purchased the property. Due to their failure to honour their undertaking you have been disadvantaged and have suffered damage (loss of amenity of the property caused by their refusal to provide the promised insurance cover needed to secure the finance to build) this is referred to as consequential loss. They know full well what consequential loss is and how vulnerable respondents are to consequential loss claims (as an insurer they are often a respondent).
You should talk to a good lawyer.
Political correctness: a doctrine which holds forth the proposition that it is entirely possible to pick up a turd from the clean end.
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