Silverstein Sues Insurer Over 7 World Trade Claim

Michael Ha

NU Online News Service, May 8, 3:26 p.m. EDT?Silverstein Properties, the leaseholder of the World Trade Center site, said it has filed a new lawsuit against Industrial Risk Insurers, one of the Twin Towers insurers and also the sole insurer of 7 World Trade Center.

The suit is separate from an ongoing legal dispute between Silverstein and some 20 insurers, including IRI, over Twin Towers coverage. The action alleges that the insurer has failed to fully satisfy its obligation to pay for the reconstruction of number 7, which was also destroyed after the 9/11 terror attacks.

Industrial Risk Insurers, which is part of the Connecticut-based insurance unit of General Electric, has already paid Silverstein some $440 million to fund the construction of the new building and for business interruption losses, the suit noted.

The suit also said that IRI, citing certain language in replacement cost endorsement in the policy, is willing to pay only for construction completed by the second anniversary of the terror attacks, even though Silverstein Properties did not gain control of the site until May 2002, explained Gerald McKelvey, a Silverstein spokesperson.

Speaking for the IRI, Dean Davidson, spokesman for the insurer, said the policy is an actual cash value policy so that when the building was destroyed, the insurer would pay the cash value.

"We have paid $440 million so far under the terms of the policy," Mr. Davidson said. "There is an additional feature in the policy--an endorsement that provides the insured with additional coverage for any work that is completed within two years of the damage, so the endorsement could provide additional payment."

Mr. Davidson added, "We continue to work with our client on appropriate payments and when they might be made. We believe this court filing is a premature and unwarranted step."

Commenting on his new lawsuit, Larry Silverstein, chief executive officer of Silverstein Properties, said the funds he is seeking from IRI for the reconstruction of 7 WTC will have "no impact whatsoever" on the rebuilding of the main site of the World Trade Center.

Mr. Silverstein is also suing insurers contending the plane crashes that destroyed the two towers represent two separate compensable claims, not the one event insurers say they were.

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Silverstein Sues Insurer Over 7 World Trade Claim

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