Norwich Union this week came under fire in the London Evening Standard after the paper claimed that the insurer was suing a schoolboy for failing to stop his seven-year old brother running into the road.
Gareth Minchin was 15 when his brother Matthew was knocked over on his way home from school, suffering brain damage.
Matthew Minchin is suing the driver of the car who is insured by Norwich Union. The boy's mother and another brother, David, are also suing, saying they suffered post traumatic stress. Together the family is claiming more than £1m.
The insurer was said to be counterclaiming against Gareth for failing in his duty to look after his brother.
But the insurer said the story was wrong. A statement from the company said: “After further consideration, we decided to drop the case against him several weeks ago, admitting 100% liability for the claim.”