Swiss Re Suit Clears Path for Future Trade Center Disputes

NEW YORK CITY-The insurance industry’s stiff upper lip in the aftermath of the World Trade Center bombings is drooping a bit now that Swiss Re International Business Insurance has sued policy-holder Silverstein WTC Properties in an attempt to limit the UK-based reinsurer’s liability for the incident. Insurers and reinsurers began issuing press releases within days of the attacks assuring policyholders of their intention to pay claims promptly and in full. Monday’s Swiss Re filing may represent the thin end of the wedge, opening the door for other insurance companies to dispute trade center-related claims with less risk of appearing either greedy or unpatriotic.

At issue is chief executive Larry A. Silverstein’s claim that the two attacks responsible for bringing down the WTC towers constitute separate incidents and should be covered as such. Swiss Re, the UK-based reinsurer responsible for 22% of the trade center’s $3.5 billion coverage, has asked the Federal District Court in Manhattan for a declaratory judgment finding that the two airplane attacks comprise one incident. Such a finding would effectively halve the $7-billion payout Silverstein has said his firm is seeking. Experts estimate a price tag of at least $5 billion to redevelop the trade center site.

Meanwhile, published reports today reveal that Silverstein has in fact started to receive some money from other insurers. According to the report, there are some 25 companies covering the WTC. The exact amount and the insurer were not disclosed.