A US court has thrown out a claim that London Market insurers must pay $27m (£18.7) pollution clean-up costs.

The landmark ruling has been welcomed by Lloyd's reinsurance vehicle Equitas, which sets aside considerable reserves for similar payments.

The Goodrich Company sued the insurers, stating it was entitled to insurance coverage for the costs of cleaning up a polluted site at its Calvert City, Kentucky chemical plant.

But last month an Ohio court dismissed the claim on the ground that it delayed unreasonably in giving notice to its insurers.

Judge Jane Bond found that Goodrich had known of contamination at the site since 1964 and by 1980 estimated the cost of clean-up at $27m, but failed to notify insurers until 1989.

She said the defendants were prejudiced by the late notice as they lost the opportunity to investigate the claim fairly. They were unable to review lost or destroyed documents because witnesses had died, were unavailable or had faded memories. Also, as Goodrich had settled with the Kentucky pollution authority there was no opportunity for the insurers to participate.

Equitas spokesman Jim Burcke, said: "We welcome the case. We do have reserves for pollution losses - it is the second largest area after asbestos."