Silverstein Dealt Blow in WTC Dispute

Real estate developer Larry Silverstein has received a major setback in his efforts to get an insurance payout of about $7.2 billion on the collapsed World Trade Center properties.The U.S. Court of Appeals for the Second Circuit has not bought Mr. Silverstein's argument that the terrorist attacks on the World Trade Center constituted two occurrences for insurance purposes and should lead to a $7.2 billion payout (based on insurance of $3.6 billion per occurrence). The case will now go to a jury, which will decide the matter. Of the 24 insurers who had provided the WTC insurance, three who were responsible for about 3% of the coverage were specifically exempted from the two-occurrence argument because they had signed a "Wilprop" form that provided a specific definition of an insurable occurrence under which the WTC attacks constitute one occurrence. According to Swiss RE, one of the major insurers on the property, all the insurers are governed by the Wilprop form, rather than a separate Travelers policy that was issued on Sept. 14, after the attack. Swiss RE said it is "ecstatic about the decision," adding that "every court that has considered Silverstein's argument to recover beyond his stated insurance policy limit has rejected it outright. We are confident a jury will do the same." Howard J. Rubenstein, a Silverstein spokesman, said, "We are fully confident that a jury hearing all of the evidence will reject the insurers' attempts to avoid paying for the cost of rebuilding the World Trade Center."