Twin Towers jury undecided over Swiss Re

The jury must decide whether the attacks on the twin towers constituted one or two insured events Keystone Archive

Swiss Re’s liability for the World Trade Center is still in the balance after a New York jury failed to reach a verdict on the landmark’s most exposed insurer.

On Thursday jurors ruled in favour of most other WTC insurers, who had argued that the September 11 attacks constituted one insured event.

The WTC leaseholder, Larry Silverstein, said the attacks on the twin towers in 2001 constituted two insured events, which meant he could collect twice on the policy.

The insurers that prevailed on Thursday – including Lloyd’s of London – are liable for around $1 billion (SFr1.3 billion) of Silverstein’s $3.5 billion policy.

The deliberations on Swiss Re and three other insurers are scheduled to resume on Monday.

The WTC insurers, led by Swiss Re, have been embroiled in a lengthy and acrimonious battle with Silverstein over the small print of the insurance policy, which was still being ironed out when the attacks took place.

Liability

The original policy drawn up by the leaseholder’s broker, Willis, defined the destruction of the lower Manhattan landmark as one insured event and limited the insurers’ liability to $3.5 billion.

But a second policy from Travelers insurers, drawn up some weeks later, did not make clear whether the felling of the twin towers would constitute one or two insured events.

Silverstein argues that the second contract should apply, which means he could potentially collect twice on the policy. The insurers insist on sticking to the terms of the original agreement.

Exposed

The Travelers contract was emailed to Swiss Re before the September 11 attacks, but the reinsurer never responded. The jury now have to decide whether Swiss Re’s silence on the matter constituted agreement.

Swiss Re is the most exposed of the insurers of the World Trade Center (WTC). It underwrote 22 per cent of insurance, which means it faces a bill of around $800 million. Its liability would double, if Silverstein prevails.

Silverstein claims he needs $12 billion to construct the ambitious complex that is to replace the twin towers, which will include the world’s highest skyscraper.

Swiss Re had been hopeful that the jury would rule in its favour because last September a New York appeals court rejected Silverstein’s claim that the attacks were two events.

The court stopped short of deciding on the issue itself, which is why the case was referred to a second court.

swissinfo with agencies

Key facts

The World Trade Center was insured for $3.5 billion.
More than 2,700 people were killed when two planes hit the twin towers on September 11, 2001.