Insurers' exposure to the 9/11 terrorist attacks has not gone away, as the owners of the World Trade Center continue to seek recoveries from that tragic event in federal court.
One of the defendants in the latest suit brought by leaseholder World Trade Center Properties, LLC—owned by Silverstein Properties—says that its insurer would be responsible for paying any judgment if the courts rule against it.
Reported in the Boston Herald yesterday, Massport, which operates Logan International Airport, says it can only be held responsible for what it is insured up to—$500 million per occurrence. It says its insurer is ACE Property and Casualty Co.
American Airlines and United Airlines flights that were eventually taken over by terrorists and crashed into the World Trade Center buildings took off from Logan International.
Also at issue is the old question: one event or two? If the attacks are deemed to be two occurrences, the insurer could be on the hook for $1 billion.
Robert Hartwig, president of the Insurance Information Institute, was quoted as saying that ultimately this is a matter for the courts to decide and it involves very complex litigation.
Last week, U.S. District Judge Alvin K. Hellerstein, sitting in the U.S. District Court of Southern District of New York in Manhattan, said a suit involving American and United Airlines that also names Massport as a defendant is to proceed to determine if the parties were negligent in allowing the terrorists to board the planes.
Silverstein was seeking more than $8 billion to cover the cost of reconstruction, but the judge reduced the possible exposure down to more than $2.8 billion.
In 2007, a group of insurers came to an agreement with Silverstein and paid more than $4 billion to settle insurance claims over the loss of the towers.
A representative from ACE declined to comment.
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