Lloyd's reconstruction and renewal vehicle Equitas has dismissed fears that it may be hit for some of the record £96bn damages awarded against cigarette companies in the United States. This follows a Lloyd's spokesman's claim that Equitas may have to meet the claim.
The shock award by a Florida jury on Friday followed a two-year trial involving liabilities for tobacco-related illnesses, such as heart disease and lung cancer suffered by 500,000 Americans.
The jury decided that cigarette makers – including Philip Morris and Brown & Williamson, a subsidiary of British American Tobacco – should pay massive punitive damages of £96bn.
The case is certain to be appealed.
James Burcke, spokesman for Equitas, which is responsible for Lloyd's £10bn pre-1992 liabilities, said its exposure for potential tobacco-related claims was minimal to nil: “We do not believe tobacco injury claims will create a significant liability for Equitas.”
Burcke thought it unlikely that insurers generally would be asked to pay-out for the case. He said it was against public policy in many US states for insurers to cover punitive damages awards.
More than half of the 500 long-tail risks Equitas has in run-off are related to asbestos, pollution and other health hazards.
Equitas is set to unveil its 1999 results tomorrow (Friday). For 1998, it recorded a net-tax surplus of £772m, after paying gross paid claims of £2.25bn.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
