Swiss Re and Lloyds face $640m court case

Posted on May 28^th 2010

Diamond distributor and producer Lazare Kaplan International (LKI) has filed a civil case in the federal court of Manhattan to sue Swiss RE and Lloyds over their refusal to pay LKI's liability insurance claims.

The court case will seek to recover $140m for diamonds that were shipped during 2008 and 2009. They had been sent to buyers in Dubai, Honk Kong and Antwerp who later defaulted on their payments. The extra $500m claimed is to compensate LKI for the "consequential and collateral damage" they suffered.

LKI allege that the losses and Swiss Re's reluctance to pay out on the claims in time were responsible for LKI being removed from the Stock Exchange in America.

While your company may not be at risk from the massive and catastrophic losses that LKI endured, the message is plain. When shopping around for your business liability insurance quote you must check that the policy covers you for all eventualities. A couple of pounds saved on a cheap liability insurance quote may be a false economy of the worst kind, if your company were to suffer a similar fate.

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