Royal & SunAlliance (R&SA) has remained defiant in the face of legal action from defence contractor Chemring Group over an explosion at its Tennessee-based subsidiary.
Chemring has filed a claim for $16.9m (£11.8m) in addition to the payout it has already received from R&SA over an explosion at Kilgore Flares Company.
Chemring said R&SA had not agreed to a reasonable settlement for property damage and business interruption, leaving Chemring no option but to take legal action.
However, an R&SA spokesman said the insurer had taken legal advice that confirmed its payout was correct.
"We believe we've made the correct payment in terms of the policy and as the matter is now subject to legal proceedings, we won't be drawn into further comment," he said.