Settlement negotiations have been successfully concluded between Silverstein Properties, the master leaseholder on the destroyed World Trade Center, and ACE Bermuda Insurance Ltd. and XL Insurance (Bermuda) Ltd, operating units of the island’s two biggest insurance companies who wrote the actual coverage on the twin towers.
ACE agreed to pay $298 million ,and XL $67 million, a total of $365 million, to settle all claims. Both companies took pains to announce that the settlement was based on “one event,” rather than two, as Silverstein has asserted in the company’s lawsuit against Swiss Re and other insurers. “The settlement is based upon a single occurrence and therefore will comprise payment of only one policy limit,” said the ACE bulletin.
The company stated that it had agreed with Silverstein to dismiss all litigation and arbitration pending between them, and indicated that “The settlement amount is within the reserve ACE has previously established for this event and does not affect the remaining group reserves for other claims arising from September 11th.” It went on to note that there’s still “an additional property coverage dispute with Silverstein” involving ACE Global Markets, the insurer’s Lloyd’s operation, “which participates with other Lloyd’s Syndicates in a separate property policy,” but that this “involves substantially less limit at a much higher attachment point.”
Silverstein Properties issued its own statement following the settlement announcement, which specified that it was a separate deal involving the interpretation of policy wording concerning the meaning of “an occurrence” which differed from that at issue in the dispute with Swiss Re.
Howard Rubenstein, a spokesperson for Silverstein, pointed out that the two Bermuda insurers “were the only participants in the insurance program that had signed binders expressly referencing the so-called ‘WilProp’ policy form and had never been advised of any different form. Unlike the policies, binders or slips issued by the other insurers, the WilProp form includes a special term that defines an “occurrence” to mean all losses attributable ‘directly or indirectly’ to ‘one cause or to one series of similar causes.”‘
Rubenstein went on to explain that the policy wording put ACE and XL “in a different posture from the other insurers based on the unique circumstances of the placing of their portions of the coverage.” He also indicated that the settlement provided for immediate payment of the “single occurrence limits,” avoiding a protracted dispute over when payment should be made.
Finally Rubenstein reiterated Silverstein’s position, and reasserted that “no other insurer can make the same claim as ACE Bermuda and XL,” adding that, “We are confident that under New York law and under the binders and policies of all of the other insurers, the separate crashes of two planes into two buildings at two separate times constitute more than one ‘occurrence.’ The insureds fully expect to recover from the remaining carriers on a multiple-occurrence basis.”
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