Royal & Sun Alliance Group didn't insure UK engineer
Turner & Newall against asbestos claims, according to a company spokesperson.

Royal & Sun Alliance has claimed it didn't insure UK engineer Turner & Newall against asbestos claims.

Royal & Sun Alliance saw its shares fall by 14% today in the wake of the asbestos liability lawsuit being brought by the engineering group. Shares initially plunged to 99p, but by 0815GMT had recovered to stand 9.5% down at 105p.

The drop will come as a blow to the troubled insurer which has previously sought to cover asbestos claims by doubling its reserves by £371m.

However a spokesman for the company denied the claim saying: "They, to our belief, are self-insured for the asbestos part of the cover and they actually have very high level re-insurance cover for that purpose."

Details of the case have emerged at an awkward time for RSA, which has promised to give full details of its capital needs next Thursday. Before backing any rights issue, investors will want more information on the group's exposure to asbestos liabilities.

T&N is claiming that RSA is liable because of an employer liability policy it provided to the company between October 1969 and March 1977.

In preliminary High Court proceedings, Mr Justice Lloyd said the underlying employee claims could be "very numerous and very substantial". He added that the asbestos-related claims could rise in years to come.

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