Shares in Horsham-based insurer Royal & SunAlliance fell by more than 14 per cent as it faced an asbestos-related lawsuit.
Engineering group Turner & Newall is understood to have filed a claim against the insurer on behalf of a group of former employees.
It claims the property and casualty insurer is liable under a policy it provided between 1969 and 1977.
It is thought RSA will argue the policy contained a number of exclusions, including for asbestos-related illnesses. Preliminary proceedings were heard at the High Court last week.
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