Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-The insurance industry’s stiff upper lip in the aftermath of the World Trade Center bombings is drooping a bit now that Swiss Re International Business Insurance has sued policy-holder Silverstein WTC Properties in an attempt to limit the UK-based reinsurer’s liability for the incident. Insurers and reinsurers began issuing press releases within days of the attacks assuring policyholders of their intention to pay claims promptly and in full. Monday’s Swiss Re filing may represent the thin end of the wedge, opening the door for other insurance companies to dispute trade center-related claims with less risk of appearing either greedy or unpatriotic.

At issue is chief executive Larry A. Silverstein’s claim that the two attacks responsible for bringing down the WTC towers constitute separate incidents and should be covered as such. Swiss Re, the UK-based reinsurer responsible for 22% of the trade center’s $3.5 billion coverage, has asked the Federal District Court in Manhattan for a declaratory judgment finding that the two airplane attacks comprise one incident. Such a finding would effectively halve the $7-billion payout Silverstein has said his firm is seeking. Experts estimate a price tag of at least $5 billion to redevelop the trade center site.

Meanwhile, published reports today reveal that Silverstein has in fact started to receive some money from other insurers. According to the report, there are some 25 companies covering the WTC. The exact amount and the insurer were not disclosed.

According to court documents, Swiss Re claims that Silverstein essentially has used the press to further his cause by commenting to various media outlets that his company is entitled to double the value of its Swiss Re coverage as well as that of the other participating insurers. In filing for a DJ action, “Swiss Re asks for greater clarification in order to continue the process of assisting clients impacted by the tragedy and to ensure that payments are promptly made to the appropriate parties,” says Jacques Dubois, Member of the Executive Board of Swiss Re. As the trade center’s biggest insurer, Swiss Re says in its filing that there is “insufficient insurance to both rebuild the World Trade Center and to fund years of rent interruption to the Silverstein group.” The company is asking Southern District Judge Denny Chin to designate “the September 11 terrorist attack as two separate insurance losses.”

Swiss Re was one of the first out of the box with an estimate of its liability in the trade center attacks, stating within days of the suicide bombings that it expected to make a payout in the neighborhood of $700 million. Its maximum liability for a single incident at the trade center is reportedly around $770 million. The firm also was quick to assert its ability to absorb the loss. “Although this is one of the largest damage incidents, the economic strength of Swiss Re is not in danger,” the firm said in a statement issued shortly after two commercial jets crashed into the trade center’s twin towers. Calls for comment to Swiss Re and Silverstein were not returned.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.