Stricken smokers thought they won a battle against Big Tobacco with the $145 billion punitive damages award in Florida last week, but it could be the insurers who pick up the tab.

Bennet LeBow's Liggett Group is suing a raft of 33 insurers - including Saul Steinberg's beleaguered Reliance Group, Sandy Weill's Travelers Insurance and massive Connecticut insurer The Hartford - to recover its $790 million share of the Florida award and the defense costs arising from the long litigation. Liggett is also seeking indemnity from future suits that might be filed against it by - among others - individuals, class actions, companies, trade unions and Indian tribes. At least one other large tobacco company is rumored to be preparing a similar suit and others could follow. "Philip Morris has clearly got coverage," said one litigator. "I know their policies inside and out." Under insurance policies that go back to the 1940s, insurers explicitly accepted responsibility for death or serious illness induced by tobacco. Some of the policies have liability limits. Others do not. Litigators estimate that insurance companies' liabilities could amount to tens of billions, if Big Tobacco really went after them. Naturally enough, the insurers have denied any liability for smoking-related illness. "We don't think we have a dog in this fight," said a spokesman for the Insurance Information Institute, a trade organization. "Obviously, we would vigorously defend any suits, and we would expect to win." Insurance litigators are eager to prove them wrong. Until now tobacco companies have held off suing their insurers because they are already plenty busy fighting 500 suits, and because new suits could open up their business to further, potentially embarrassing, scrutiny. But faced with possible bankruptcy, they might be forced to add to their litigation burden. Liggett got off lightest in the Florida suit. Defendants were also awarded $74 billion in damages from Philip Morris; $36.3 billion from R.J. Reynolds; $17.6 billion from the Brown & Williamson subsidiary of British American Tobacco, and $16.3 billion from Lorillard. Under Florida law, verdicts threatening a company with bankruptcy can be quashed, so there is a widespread expectation that the award will be substantially reduced. But, as the Liggett suit suggests, Florida could just be the first of many suits. There is also a possibility that the Florida award could be overturned on appeal. In 1998, Big Tobacco entered into a massive $246 billion settlement with most of the U.S. states, but it has yet to lose a major suit at appeal. Liggett has been the most aggressive of the tobacco companies in seeking to settle potential tobacco claims. It was financier LeBow's decision to break ranks with the other tobacco companies, settling with five states for $2 billion, that eventually led to the 1998 settlement.

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