April 29, 2002 by Canadian Underwriter
A document just released by parties involved in the dispute over coverage for the World Trade Center (WTC) explains the position of representatives for the Silverstein interests, who are calling the September 11 attacks two separate events and seeking double the payout on their insurance coverage.
The statement includes portions of deposition testimony from representatives of Swiss Re, on the hook for about 22% of the loss, representatives of Willis, the broker who placed the coverage, the Silverstein risk manager, as well as insurer documents.
Swiss Re and other insurers involved have not released public statements in response to the document.
The document focuses less on why the attacks on the WTC should be considered one event, and more on claims that the building was not covered by the policy set out by Travelers Insurance at the time of the attacks. While a final policy had not been completed, lawyers for the Silverstein interests (including WTC lessor Larry Silverstein), building owners the Port Authority of New York, and Westfield America, which leased the mall below the WTC, say the Travelers form was in effect on September 11 for 23 of the 25 carriers involved in insuring the buildings. There is no definition of “occurrence” in the Travelers form, they note.
Silverstein has settled with two insurers involved in the case, ACE and XL, and the documents note that these insurers were not using the Travelers form, but the “Wilprop” form. These insurers paid as if the attacks constituted just one event.
The document goes on to list evidence suggesting that the Travelers form was in effect, based on testimony and documents produced during deposition. “Any claim that the policy was not final and that Travelers or any other carrier had the right to negotiate a definition of “occurrence” after the events of September 11 is fanciful,” the Silverstein document states.
Parties representing the insurers involved filed a 105-page submission to federal court late last week. The Silverstein document was in the manner of a response to this filing.
Swiss Re is seeing a declatory judgement in the case, while Silverstein has countered by seeking a summary judgement. Arguments on the summary judgement are set to be heard on May 16, while a trial on outstanding issues will be in September.
“The resolution of the issue about the number of occurrences has profound implications for the public as a whole, and transcends the private interests of the parties to the litigation,” says Silverstein lawyer Howard Rubenstein. “Without a prompt payout at the amount sought by the Port Authority and the Silverstein interests, the rebuilding of World Trace Center site will be delayed for years.”
Insurers have advanced Silverstein US$75 million at this point. A single occurrence settlement would mean a total payout of about US$3.5 billion, but would be doubled if the two occurrence theory is accepted by the courts.