Zurich may be forced into a $500m (£270m) pay-out after a court ruled that the company was liable for the debts of a bankrupt chain of US nursing homes.
A senior US bankruptcy judge in Texas ruled that ZC Speciality Insurance Company (ZCS), was a partner in the ownership and operation of a chain of 87 nursing homes, which traded as Senior Living Properties (SLP).
ZCS is a subsidiary of Zurich Financial Services Group.
Zurich is consequently liable for up to $500m in debts incurred by the chain.
Zurich had argued that it was not a partner in the business, but that it had provided a surety bond "in favour of a creditor of SLP".
But the judge said that Zurich was "not only a partner under Illinois and Texas law, but also affirmatively attempted, during the litigation of the case, to conceal its true role in the transaction".
Sources close to The Marks Firm, which represented the trustee for the bankrupt estates in the case, said Zurich's testimony was "Clintonesque" and "evasive".
A Zurich statement said ZCS had filed "notices of appeal of the decision" and that the company had retained "additional outside counsel" to represent the company.
"ZCS is vigorously appealing the underlying determination that it is a partner in the SLP business and liable for SLP's debts," the statement added.
"ZCS is also contesting the damages complaint, asserting numerous defences to the various categories of damages asserted."
