Appeals court rules for Swiss Re in WTC dispute

NEW YORK--A federal appeals court has upheld a jury verdict that the Sept, 11, 2001, terrorist attack on the World Trade Center was a single occurrence under the terms of the Willis Group Holdings PLC policy form agreed to by the lead insurer, Swiss Reinsurance Co.

WTC leaseholder Silverstein Properties Inc. had argued that the destruction of the Twin Towers was caused by two aircraft, the loss was separate occurrences under its coverage and therefore is two policy limits of $3.55 billion each.

In the first phase of the litigation in 2004, a jury found that nearly half of Silverstein's two dozen property insurers, including Swiss Re, were liable for only one occurrence limit. A separate jury in the second phase of the trial concluded that nine of the insurers were liable for two occurrences.

"Silverstein's two-occurrence claim against Swiss Re gave rise to five years of protracted litigation," said Jacques Dubois, chief executive officer of Swiss Re America Holding Corp., in a statement.

The decision by the U.S. Court of Appeals for the Second Circuit in New York, "resolves Silverstein's two-occurrence claim once-and-for-all in Swiss Re's favor," he said.

Under the ruling, Swiss Re's payment obligation is subject to the terms and conditions of the operative Willis policy form and cannot exceed Swiss Re's 25% share of the $3.5 billion loss limit Silverstein purchased, Swiss Re said.

Silverstein's insurance program for the WTC complex, which was placed through London-based broker Willis, had not been finalized at the time of the terrorist attack.