Zurich and Allianz have issued trade insurance policies covering losses from transactions involving troubled iron ore trader Radiant World. The «Financial Times» reported Friday, citing people familiar with the matter.

The collapse of Radiant, which is facing lawsuits from creditors in the United Kingdom and Singapore over allegedly falsified documents used to support its trading activities, could therefore result in losses for the insurers.

Radiant and its founder, Pinkesh Nahar, deny any wrongdoing.

Insurance Against Payment Defaults

According to the report, Zurich had insured Radiant against payment defaults by several trading partners, including, according to people familiar with the matter, commodities giant Glencore. One of the policies reportedly had coverage in the tens of millions of dollars.

The Baar, Switzerland-based commodities group was one of Radiant’s largest trading partners and faced the threat of legal action from the Singapore-based iron ore trader. Radiant claimed that its relationship with Glencore went beyond that of a mere counterparty, describing the Anglo-Swiss commodities group as a «leading partner in the business relationship.»

Glencore has described those claims as «unfounded.»

No Material Risk

Allianz Trade, a subsidiary of the German insurance giant specializing in trade credit insurance, had also insured Radiant against payment defaults. According to people familiar with the policy, its overall exposure was lower than Zurich’s.

Zurich said in a statement that it has “no material exposure to Radiant World.”

Allianz Trade and Radiant declined to comment to the newspaper.