NU Online News Service, Aug. 18, 12:44 p.m.EST

Federal Insurance Co., a unit of Chubb Corp., has filed alawsuit against about 15 insurance companies over costs related tothe defense of Deutsche Bank from claims filed after Sept. 11.

Two of Deutsche Bank's buildings in Manhattan were damaged inthe aftermath of the attacks on the World Trade Center. Contractorswere hired to demolish the structures.

The suit centers on the alleged “wrongful refusal” of theinsurers to pay their fair share of the bank's defense againstclaims from various clean-up, remediation and demolitioncontractors seeking damages for various ailments they say werecaused by breathing allegedly toxic air.

Chubb says Federal has paid about $5 million, about one-third ofthe bank's total defense costs. Chubb says the amount is“significantly more than its proportionate or fair share of theunderlying defense costs.”

About 327 workers for the various contractors hired to clean-upand demolish the buildings filed suit against Deutsche Bank. Theworkers seek damages for alleged injuries caused by breathingcontaminated air and handling debris without proper respiratorymasks and equipment. The workers allege they have suffered asthma,chronic bronchitis, respiratory problems, eye and ear problems,acid reflux, alcoholism, seizures, depression, cancer and death,according to court records.

The lead defendant in the case is Commerce and IndustryInsurance Co., a subsidiary of American International Group Inc.(AIG). Commerce issued policies to PAL Environmental Safety Corp.,a company specializing in asbestos removal, building contaminationand demolition.

Commerce denied coverage to Deutsche Bank in May 2006. RoyalSurplus Lines Insurance Co. and Landmark American Insurance Co.,also named as defendants, denied coverage in June 2006. LibertyMutual is also in the group of defendants.