A group of 10 syndicates at Lloyd's of London and eight other insurers has filed suit against the Port Authority of New York and New Jersey, disputing the transportation agency's claim that it is owed $2.1 billion to help rebuild part of New York City's World Trade Center. The property in question was included as part of the 99-year lease agreement with Larry Silverstein.
The Port Authority joined Silverstein in suing the insurers of the trade center complex seeking a ruling that, because each tower was hit by a separate plane, the center's destruction constituted two events for insurance purposes. Citing a federal jury's agreement with Silverstein, the Port Authority also is seeking coverage for two separate losses on other property destroyed in the Sept. 11, 2001 attack.
"The Port Authority is not entitled to recover for the same property under both the Silverstein and the Port Authority insurance or to obtain double its own insurance to make up for a 'shortfall' in its litigation against the Silverstein insurers," said Kenneth W. Erickson, an attorney with Ropes & Gray, which is representing the insurers.
The agency already has collected $950 million of its $1.5 billion limit from its insurers, but asserts that there is a shortfall in the amount necessary to rebuild 10 million square feet of commercial space on the site. The Port Authority maintained its own insurance on property at the site that was not leased by Silverstein. It argues that this insurance separately covers its interest in the deficit resulting from the Silverstein property insurance and that it is entitled to double its insurance limits, or $3 billion.
In addition to underwriters at Lloyd's, the plaintiffs include France's unit Axa Global Risks, Copenhagen Reinsurance, Great Lakes Reinsurance (UK), Houston Casualty, QBE International Insurance, Sirius International Insurance, Wurttembergische Versicherung AG, and Zurich Specialties London.
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