Canadian Underwriter

Judge calls WTC attacks “one occurrence”

September 26, 2002   by Canadian Underwriter

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A federal judge in New York has declared that the felling of the World Trade Center towers by two planes on September 11, 2001 was “one occurrence”, not two as claimed by the leaseholder.
The ruling applies to three insurers, St. Paul Fire and Marine Insurance Co., Hartford Fire Insurance Co. and Royal Indemnity. U.S. District Court Judge John Martin ruled that the policy wording used by these insurers in the contract with WTC leaseholder Larry Silverstein is sufficient to have the attacks declared one occurrence. Thus, the insurers are required to pay just once on the claim, rather than twice, as Silverstein had asserted.
“The ordinary businessman would have no doubt that when two hijacked planes hit the twin towers in a 16-minute period, the total destruction of the World Trade Center resulted from one series of similar causes,” Justice Martin writes in his decision.
He did not hold with Silverstein’s claim that because policy wording was not finalized by September 11, it is up to the courts to determine the definition of occurrence. “This court does not have a roving commission to impose its conception of what is fair upon the parties before it,” Justice Martin writes.
The decision is a welcome signal for other insurers involved in a similar suit with Silverstein, and should expedite the second trial. These insurers are led by Swiss Re, which held the lion’s share of the property policy. In total, the policies are worth US$3.5 billion, although the three insurers involved in the case are on the hook for just US$112 million.
The second trial is set to commence in early November.

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