Allianz Joins WTC Lawsuit

January 4, 2002

Germany’s Allianz AG has elected to become part of the World Trade Center dispute by joining Swiss Re and Chubb Corp. in seeking to have the destruction of the twin towers declared “one occurrence,” rather than two.

As detailed in previous articles, Larry Silverstein, whose company holds the master lease on the property, has asserted that two loss events occurred, while the insurers, headed by Swiss Re, the primary carrier, have sought a declaration from the federal court in Manhattan that only one “loss event” occurred on Sept. 11. $3.5 billion is staked on the outcome.

It now appears likely that all the insurers directly involved in coverage of the World Trade center will eventually be brought into Swiss Re’s declaratory relief action. Silverstein filed a lawsuit against Travelers, and has sought to join 18 other companies in the action. Chubb and Allianz have elected to enter the proceedings, and its unlikely that other carriers can afford to be left out.

While the issue is fairly straight forward, no one can say with certainty how the court will rule, or how an appellate court would consider the question. In addition, while Swiss Re originally sought a quick ruling, the presence of additional parties will inevitably slow its progress, as each seeks to present evidence on its behalf. The court recently ruled that discovery proceedings should be concluded by the end of April, which would allow the case to come to trial this year. The inclusion of a number of additional parties may well make that goal untenable.

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