Tuesday December 7, 07:04 AM Twin
Towers' insurers must pay double By Gail Appleson and Paul
Thomasch
NEW YORK (Reuters) - A New
York developer hoping to rebuild the destroyed World Trade Centre has
won a major victory against his insurers, after a jury decided the
hijacked airline attacks of September 11, 2001, were two separate
events.
The verdict in U.S. District
Court in Manhattan means the site's leaseholder, Larry Silverstein,
could get twice as much money from his policies with the nine insurers
of the twin towers to finance new construction.
Silverstein, who signed his lease
just six weeks before the towers were destroyed, said he was
"thrilled" by the decision on Monday. One of the insurers, Allianz,
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 (3.6 billion pounds) -- 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 (900,000 square metres) of office space
on what has become known as Ground Zero.
The verdict by the jury after
11 days of deliberations "will ensure a timely and complete rebuild of
the World Trade Centre," Silverstein said.
"I strongly felt, and the jury
agreed, that the destruction of the Twin Towers by two separate
airplanes at two separate times was two separate occurrences and that
these insurers have an obligation to pay their fair share to help make
Lower Manhattan whole again," he said in a statement.
Silverstein, one of New York's
best-known developers, leased the 16-acre (6.4-hectare) complex that
was destroyed by Islamic militants who flew two hijacked aircraft into
the landmark towers. Nearly 2,800 people died and the buildings
collapsed.
This was the second trial
resulting from Silverstein's
efforts to collect double the insurance money on policies he bought
from a syndicate of 23 carriers two months before the trade Centre was
destroyed.
A third trial with a different
jury might be held to determine how much Swiss Re will pay.
The large insurer has opted
out of a separate ongoing process in which a three-member panel of
experts is determining the value of the World Trade Centre when it was
destroyed and how much the other major insurers may owe.
Silverstein lost a first round
when a jury issued verdicts in late April and early May holding that
Swiss Re, the largest insurer, and a group of others used coverage
forms that defined the destruction of the Twin Towers as one event.
Silverstein is appealing
verdicts from the first phase to the U.S. Second Circuit Court of
Appeals.
Monday's verdict affects:
Allianz Global Risks U.S Insurance, a unit of German insurer Allianz;
Travelers Indemnity and Gulf Insurance, now both part of St. Paul
Travelers Companies; Industrial Risk Insurers, owned by General
Electric; Royal Specialty, owned by British insurer Royal &
SunAlliance at the time of the attack; TIG Insurance, a unit of
Canada's Fairfax Financial Holdings; Tokio Marine and Fire Insurance,
part of Japan's Millea Holdings; Twin City Fire Insurance, a unit of
Hartford Financial Services Group and Zurich American Insurance, a unit
of Swiss insurer Zurich Financial. A portion of Allianz's policy was
covered by French reinsurer Scor.
Allianz spokeswoman Sabia
Schwarzer said the company would "press forward with a court-supported
appraisal process that we believe will establish that the Silverstein
parties did not sustain covered losses in excess of one policy limit."
She said Allianz would "pursue
all our legal remedies."
"Today's verdict will not have
a material impact on The Hartford," said Hartford spokeswoman Cynthia
Michener.
