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

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

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

The suit centers on the alleged “wrongful refusal” of the insurers to pay their fair share of the bank's defense against claims from various clean-up, remediation and demolition contractors seeking damages for various ailments they say were caused by breathing allegedly toxic air.

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

About 327 workers for the various contractors hired to clean-up and demolish the buildings filed suit against Deutsche Bank. The workers seek damages for alleged injuries caused by breathing contaminated air and handling debris without proper respiratory masks 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 Industry Insurance Co., a subsidiary of American International Group Inc. (AIG). Commerce issued policies to PAL Environmental Safety Corp., a company specializing in asbestos removal, building contamination and demolition.

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

Special Reports /

Chubb Sues Insurers Over Defense Costs For Deutsche Bank

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