Insurers refuse to pay out on claim for railway tunnel collapse

Insurers, including Brit, QBE and Royal & SunAlliance (R&SA) are facing a £155m legal battle against Tesco over the collapse of a railway tunnel in 2005.

The supermarket giant had planned to build a new store in Gerrards Cross, building a tunnel over a railway line. But part of the 320m long tunnel collapsed on to the railway line below, closing the line in the summer of 2005.

Tesco claimed on its insurance after train operator Chiltern Railway sought "substantial" compensation from the retail giant. But court papers reveal that Tesco's insurers have refused to pay out.

Other insurers named in the papers are Ace, New Hampshire, and Lloyd's syndicates Limit 386, Imagine 2525 and Newline 1218.

The chain is suing its insurers for a court declaration that it is entitled to be covered for damages it will have to pay to Chiltern, and its own costs and expenses.

Royal & SunAlliance is understood to be the main insurer for Tesco's liability and contract works for the project.

Meanwhile, Chiltern Railway is pushing ahead for substantial compensation from Tesco which, according, to the writ has already paid out £4m.

Before the work started, Tesco entered into an agreement with Chiltern Railway, Network Rail and M40 Trains to pay compensation for all costs, losses and expenses resulting from the project.

The collapse led to the closure of the Snow Hill to London line between two stations, for nearly two months.

A spokeswoman for R&SA said it had already paid out on a public liability policy and did not believe the current claim was valid.

The other insurers and Tesco declined to comment.