NU Online News Service, October 19 – A federal appeals court has upheld separate jury verdicts that took differing views of whether the September 11, 2001 terrorists destruction of the World Trade Center involved single or multiple insurance claims.

The Second Circuit U.S. Court of Appeals in New York affirmed jury verdicts reached in April and December of 2004 that declared the attacks were one and two events respectively.

The case pitted several insurers against developer Larry Silverstein, who took over the lease for the World Trade Center site just several weeks before the September 11 attacks.

Silverstein argued for the two-event scenario, which would increase substantially the payout, while the insurers sought a one-event ruling. The case was complicated by the fact that varying policies covering the site were in varying degrees of finality at the time of the attacks.

The Appeals Court ruling did not have any problem with the fact that differing interpretations could be given to differing policies. This all-or-nothing supposition is mistaken because it assumes that the congruent coverage was achieved during the binder period, and ignores overwhelming evidence that different insurers issued interim binders governed by different forms, the ruling stated. These forms were designed with different interests in mind and, not surprisingly, yielded different results.

The court went on to stress that the differing rulings were therefore not a manifestation of judicial error, but rather a reflection of the fact that the parties were at various stages of negotiating coverage when the two hijacked airplanes destroyed the WTC.

Parties Respond

As a result of the ruling, Swiss Re, Lexington Insurance Company, and Lloyds of London will be able to treat the attacks as one event.

Jacques Dubois, chief executive of Swiss Re America Holding Co., said, Todays decision resolves Silversteins two-occurrence claim once and for all in Swiss Res favor.

But Allianz, Zurich American Insurance Company and Travelers Indemnity Co. could have to pay an additional $1.1 billion since they were on the receiving end of the jury verdict that said the attack was two events.

Silverstein issued a statement saying merely, the court has spoken and the time has come for all insurers to pay what they owe.

St. Paul Travelers, parent of Travelers Indemnity and Gulf Insurance Co., issued a statement saying the ruling would have no impact on earnings since it had already been factored into the conglomerates financials.

The single-multiple event dispute was not only the obstacle to full payment, as the transfer of a portion of the site from Silverstein back to the Port Authority of New York and New Jersey has also raised coverage issues.

Earlier this week, St. Paul Travelers said that it had agreed to honor Silversteins claims for the rebuilding of the site after reviewing the implications of the transfer of ownership from developer Larry Silverstein to the Port Authority of that portion of the complex ready for building. But not all the details of the payment have been worked out, the company added.