Twenty Lloyd’s Syndicates filed a brief with the U.S. Court of Appeal on Friday in support of Swiss Re, Travelers and other insurance companies in their battle with Silverstein Properties over whether the destruction of the World Trade Center constituted one or two “occurrences” within the meaning of the insurance coverage provisions.
The filing brings even more insurance companies into the high profile dispute with over $3 billion at stake. Reuters quoted the Lloyd’s brief as stating that the Silverstein interests had valued the full replacement cost of the twin towers at $3.945 billion, while “at the same time, they chose to insure the entire property as one insured location for $3.546 billion.” The brief indicated that recovering for two losses was thus precluded, as the attacks were one coordinated action that destroyed one insured location.
The brief was prepared by David Boies, a well known attorney, who first rose to prominence for his handling of the Justice Department’s case against Microsoft, and has recently represented Adelphia Communications Corp. and Tyco International.
The brief supports Swiss Re’s contention that the attacks were placed near enough in time and in coordinated intent that they should be designated as “one occurrence.” Under the terms of a binder prepared by Willis, the WilProp form, the language covers an occurrence or series of occurrences as one insured loss. Silverstein has vigorously contested the interpretations of the insurers, and has asserted that another form, the Travelers form, was used, which doesn’t contain the restrictive language found in the WilProp Form.
The Lloyd’s brief was filed jointly by a number of companies, including Chubb and AIG, in support their interests in limiting the amount of the recovery to one occurrence. It also asserts this position on behalf of ACE Limited, General Electric’s reinsurance operations, Hiscox plc and Amlin plc, as well as other Lloyd’s syndicates. Also joined in the filing were Great Lakes Reinsurance, a division of Munich Re, Wurttemburergische Insurance, HCC and Australia’s QBE, all of whom do business in the London market.
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