Swiss Re and World Trade Center owners on verge of legal battle

Swiss Re says the two attacks on the World Trade Center were one event Keystone Archive

A legal row is brewing between the world's second largest re-insurer, Swiss Re, and the World Trade Center's main leaseholder, Larry Silverstein, over the size of the insurance claim for the September 11 attacks.

Swiss Re have sought a “declaratory judgement” from a Manhattan court over whether the terrorist attacks on the twin towers constituted a single insured event, or two, given that two aircraft crashed into the buildings.

The Financial Times newspaper suggested on Monday that Swiss Re’s move was aimed at limiting its and other insurers’ exposure to $3.5 billion, the insured value of the World Trade Center.

The legal move follows Silverstein’s suggestion that the assault on the twin towers was two separate attacks, implying that he could make two claims worth $7 billion.

His firm, Silverstein Properties, and Westfield America purchased the twin towers last July for $3.2 billion.

Speed up claims process

Stephan Dishart, the head of Swiss Re’s media communications for North America, confirmed to swissinfo that the company had filed a declaratory judgement request but said the legal action was aimed at speeding up the claim process.

“What Swiss Re is trying to do is to take steps to provide an initial payment to all of those insured for the World Trade Center property. We’ve joined numerous other insurers in expediting a cash advance process.

“I can’t speak for Mr Silverstein” he added, “but he has broadly communicated his view that he seeks to multiply the coverage we agreed to provide.

“If we started paying and left this issue to another day we could potentially compromise the interest of other involved parties,” he concluded.

Liable for fifth of damages

Swiss Re is liable for 22 per cent of the property damage insurance cover on the complex, with the rest shared between about 20 other insurers.

In its court filing, Swiss Re sought “a declaration that the damage… is one insurance loss and not multiple and separate and unconnected losses as Mr Silverstein is claiming in the media”.

Silverstein Properties responded by saying that Swiss Re’s actions were “absolutely without merit” and that it was trying to evade its obligations.

Swiss Re pointed out that the insurance policy had not been confirmed at the time of the attack, and that it was honouring its commitment on the strength of an outline of the policy – known as a placing slip – provided by the broker.

Last month, Swiss Re said the twin towers disaster would cost it SFr2 billion – two-thirds of last year’s net profit. Its exposure could be considerably more if Silverstein were able to make two claims.

swissinfo