Canadian Underwriter

Silverstein appeal to be heard on WTC “occurrence” case

January 7, 2003   by Canadian Underwriter

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An appeal from World Trade Center (WTC) leaseholder Larry Silverstein will be heard by a U.S. federal appeals court. Silverstein is challenging a ruling by U.S. District Court Judge John Martin which said that for those insurers covering the WTC under the “Wilprop” form, the September 11, 2001 terrorist attacks would be considered one occurrence.
The ruling applied to only three of the 22 companies covering the complex, which was felled in the attacks when planes were flown into its two office towers.
Silverstein is covered to a maximum of US$3.55 billion, but is asking for double this amount, saying that as two planes were flown into the towers, this constitutes two separate loss events.
In deciding to hear Silverstein’s appeal, the 2nd U.S. Circuit Court of Appeals said there was room for different interpretations of the district court verdict.
Other insurers still await a lower court ruling on coverage written on Travelers Indemnity forms, which do not clearly define “occurrence” as the Wilprop forms do.
Silverstein has filed two briefs with the appeals court, one of which states that the three insurers had been told they would be bound under the Travelers form, rather than Wilprop. The other asks the court to rule that as the Travelers form does not define “occurrence”, legal precedent should be used to determine what constitutes one or multiple occurrences. It points to one case where Travelers itself argued the four court fires set by the same man at the same time constitute separate occurrences. Ironically, Travelers won its argument on September 11, 2001.
“Travelers cannot change the meaning of the word ‘occurrence’ depending on what is best for its balance sheet,” says Silverstein spokesperson Howard Rubenstein. “If four separate court house fires started by a single arsonist counts as four separate occurrences as a matter of law, then the two separate fires started in two separate buildings as a result of two separate airplane crashes count as two occurrences as a matter of law as well, whether or not those fires were the result of a single terrorist plot.”
The appeal is set to be heard on March 24.

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