World Trade Centre insurance claims widen

Not everyone agrees on how much insurers should pay out after the September 11 attacks Keystone Archive

The controversy over insurance damage payments from the destruction of the twin towers of the World Trade Centre in New York has taken a new turn.

This content was published on January 4, 2002 - 11:32

Claims against the Swiss Reinsurance Company of Zurich have been broadened by the leaseholder of the buildings, Larry Silverstein. He has petitioned a New York court to expand its case against Swiss Re to include 19 other insurers that underwrote the policy on the centre.

Swiss Re, which has the largest liability in the consortium, has already tried to limit the total losses to $3.55 billion (SFr5.85 billion), the maximum agreed size of one claim.

A spokesman for Swiss Re in New York told swissinfo on Friday that the company was preparing to comment on the development soon.

However, the dispute continues with one central question: Was there one attack on the centre on September 11 by terrorists or two?

Billions at stake

Silverstein, who signed a 99-year lease last July, has maintained that the towers were destroyed by two separate attacks and that he is therefore entitled to $7.1 billion under the terms of his insurance policy.

The insurance companies disagree. Swiss Re, as the lead insurer, asked the United States Federal court for the Southern District of New York in Manhattan in October to confirm that the attacks - in which the 110-storey buildings were struck by hijacked aircraft 18 minutes apart - were one event.

Swiss Re said it was making the step to speed up the process of providing an initial payment to all those insured for the World Trade Centre property, including the Port Authority of New York and New Jersey as owners, so that they could meet short-term obligations.

Who gets payments?

The request also seeks direction from the court with respect to the question of to whom the insurance payments should be made.

Swiss Re has said it is committed to meet 100 per cent of its obligation to pay approximately three quarters of £1 billion to its insure d parties for the World Trade Centre loss.

Commenting on expansion of the claims, Silverstein said in a statement on Friday that it was "unfortunate" that he and his lawyers had been forced to sue to enforce their rights.

"We are confident of our legal position that the crashes of two separate planes into two separate towers at two separate times entitle us to claim that there was more than one occurrence within the meaning of our insurance contracts," he said.

A court decision is expected by early summer.

Despite the destruction of the centre, Silverstein is still paying more than $100 a year in rent to the Port Authority of New York and New Jersey, as well as $36 million a year in debt service.

Estimates for rebuilding the complex run from $4 billion to $6 billion.

swissinfo with agencies

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