Creechurch Underwriting is facing a multi-million pound lawsuit from supermarket giant Asda.

The supermarket chain is suing Lloyd's corporate member, Creechurch Dedicated, for £2.9m, as well as members of Syndicate 962 for the 2001 and 2002 years of account.

The underwriters are accused of failing to provide cover for the company against employers' liability, public and products liability, and financial losses.

According to a High Court writ, Asda said Creechurch was obliged to cover it under a stop loss protection endorsement in the policy.

The supermarket claimed the underwriters had agreed to Willis, the broker, providing claims handling facilities and, as a result, agreed that claims against Asda, which fell within the policy excesses, would be investigated, handled, settled, and paid by Willis.

It also said that the underwriters could handle any claims of more than £20,000, which would be referred to Creechurch head of claims, Peter May.

Total self-insured claims paid out by Asda reached the aggregate limit of £7.5m by April 2005. By 30 May 2006 they amounted to £11,796,757, the writ said.

A payment of £2.5m was made by the underwriters' reinsurers on 30 June 2006, under the 2001 policy.

The total of self insured claims paid by Asda under the 2002 policy reached the aggregate limit of £10m by February this year, and by 30 May amounted to £11,192,703.

Asda argues that the underwriters are obliged to cover it under the stop loss protection endorsement in the policies, and to cover for the total sum of £2,989,460 retrospectively, but have refused to do so.

Creechurch refused to comment on the proceedings.