British insurers could face lawsuits after cigarette manufacturer Liggett decided to sue its insurers in the US.

Liggett is suing 32 insurance companies to recover all its defence and indemnity costs. Large UK insurers are thought to be among those that provided cover for Liggett.

One fear for tobacco groups is that the existence of insurance cover can encourage judges and juries to increase the size of damages awards.

Analysts believe it is possible other tobacco companies may launch actions.


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