Posted on 14 Dec 04
A jury has decided that the hijacked airline attacks that destroyed the World Trade Center were two separate events, doubling to $2.2 billion the damages leaseholder Larry Silverstein can collect from insurers. Silverstein had hoped the 11-member jury would determine that the language of the insurance policy treated the attacks as two occurrences.
That doubled the $1.1 billion in coverage provided by nine insurance companies involved in the dispute. This was the second trial resulting from Silverstein's efforts to collect more than the $3.55 billion of insurance he bought from a syndicate of 23 carriers two months before the trade center was destroyed on Sept. 11, 2001.
The case involved:
Allianz Global Risks U.S Insurance Co., a unit of German insurer Allianz AG
Travelers Indemnity Co. and Gulf Insurance Co., now both part of St. Paul Travelers Cos. Industrial Risk Insurers, owned by General Electric Co.
Royal Specialty, owned by British insurer Royal & SunAllianc at the time of the attack
TIG Insurance Co., a unit of Canada's Fairfax Financial Holdings Ltd.
Tokio Marine and Fire Insurance Co., part of Japan's Millea Holdings Inc.
Twin City Fire Insurance Co., a unit of Hartford Financial Services Group Inc.
Zurich American Insurance Co., a unit of Swiss insurer Zurich Financial
A portion of Allianz's policy was also covered by French reinsurer Scor (SCOR.PA:).
Silverstein, who signed his lease just six weeks before the towers were destroyed, said he was "thrilled" by the decision. One of the insurers, Allianz AG, said it was "disappointed" and pledged it would appeal the verdict if necessary.
Silverstein has fought the insurance companies in court with the argument that he was owed $7 billion -- double the amount of his $3.5 billion policy -- on the grounds that the attacks on the towers were two separate events.
Even winning this case, the most he could realize is less than $5 billion. Under this decision, he could get $2.2 billion but a separate appraisal phase is still pending that could affect that payout.
Silverstein has vowed to restore 10 million square feet of office space on what has become known as Ground Zero.
St. Paul Travelers Companies, Inc. announced that the impact of theWorld Trade Center decision, taking into account the Company's reserve position and reinsurance, will be immaterial to the Company.
French re-insurer Scor said it would fight a U.S. jury decision to treat the World Trade Center hijacked airliner attacks in 2001 as two separate events as its shares fell sharply on the decision.
British general insurer Royal & Sun Alliance said it was too early to assess the financial impact of the U.S. jury decision.
Zurich Financial may have to pay extra damages of up to $45.7 million after a U.S. court ruled two planes destroying the World Trade Center in 2001 should be seen as two separate events in insurance policies. "The question is, will there be an additional payment. There may be, that depends on the appraisal, and it could be anything between zero and 45.7 million dollars," a Zurich spokesman said.
The ruling did not include Swiss Re -- which underwrote $877 million for WTC coverage.