Jury Trial in Works for Twin Towers Dispute

December 24, 2002

A jury will apparently decide whether the terrorist destruction of the World Trade Center’s twin towers was one event or two and will determine how much insurers must pay to rebuild the site. According to BestWire and Comtex, a federal appeals court rejected a motion by three insurers who hoped to avoid a jury trial and argued that destruction of the towers was a single occurrence.

The insurers, Federal Insurance Co., a unit of Chubb Corp.; Lexington Insurance Co., a unit of American International Group Inc.; and Zurich American, hoped to convince Judge John S. Martin Jr. that the form that they say governs their coverage for the property, the WilProp form, contains a unique definition of the term “occurrence,” under which recovery is limited to a single occurrence.

The three insurers hold approximately 8.5 percent of the entire coverage of the World Trade Center buildings leased by Silverstein Properties affiliates from the Port Authority of New York and New Jersey.

Judge Martin said in a statement that evidence showed the three insurers had been informed that the WilProp form was replaced by a form from Travelers Indemnity, a form that apparently includes no definition of “occurrence.”

Silverstein claims that the insurers agreed to follow the Travelers form and asserts that since the form does not contain a definition of the term, the destruction of the towers constitutes two occurrences for the purposed of insurance

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