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WTC insurance breakdown

GlennB

Loggerheaded, earth-vexing fustilarian
GlennB
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Does anybody have a link to a breakdown of the insurance figures for WTC?
i.e. how much each individual building was insured for?

cheers
 
The WTC buildings were insured together, with a policy with global reinsurer Swiss Re that had an upper limit of ~$3.5b per occurance. The 9/11 attacks led to some problems because the building owners insisted that the attacks were two separate occurances (two planes, two buildings), thus were entitled to $7b from Swiss Re, while Swiss Re argued that the attack was one occurance (one attack involving two planes) and only owed $3.5b. The courts ruled in Swiss Re's favour in 2004. Googling "Swiss Re" with WTC should find some links.

Other insurance notes from Wikipedia:
Cost estimates for rebuilding the site range from $10 billion to $12 billion. This was a major motivation behind a site-insurance trial.

The World Trade Center site, 2004.During the trial, Silverstein staffers insisted that the destruction of the site was the result of two separate attacks and entitled the business to $6.8 billion, double what it paid for the site in July 2001.

Insurers said that the attacks were a single event and entitled the business to only half their claim. The jurors agreed that most of the insurers were limited to a single insurance award, losing the business $2.4 billion.

A disputed $1.1 billion held by the remaining insurance companies was resolved in December 2004 when jurors agreed with Silverstein staffers that the destruction of the site was the result of separate attacks.
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Thanks - according to those figures WTC7 was worth about 12% of the total. Or would that be 24% of the original 3.5 billion (which seems a lot) ?
 
GlennB said:
Thanks - according to those figures WTC7 was worth about 12% of the total. Or would that be 24% of the original 3.5 billion (which seems a lot) ?
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WTC7 was insured seperately from the twin towers as Silverstein originally developed it and owned it. I think so, anyway.
 
Mancman said:
WTC7 was insured seperately from the twin towers as Silverstein originally developed it and owned it. I think so, anyway.
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Yes, that is correct.

As an aside, something that most people do not realize is that Silverstein's lease at the World Trade Center also included WTC4 and WTC5, not just the twin towers.
 
Glenn,

Here is a link to a recent court decision on a motion for summary judgment regarding whether and which insurers have a duty to defend the Silverstein entities wrt some 300 lawsuits brought by persons injured or on behalf of persons killed at the WTC on 9/11.

It it is not in relation to the amounts actually collected from insurers but it spells out all the of the policies in effect, etc. rather nicely.

http://www.nysd.uscourts.gov/rulings/03cv0332_opinion_060806.pdf

Edit to add: actually, this decision relates to liability coverage, not property coverage, so it's not what you are looking for. But I'll leave it here just because it's interesting :)

The September 11 cases consolidated before me, totaling over 3,000 in number, have been organized under separate master dockets.

The cases among the insurance carriers inter se and with the insured and additional insureds are docketed as 03 Civ. 00332.

Cases alleging personal injury and wrongful death resulting from the attacks of September 11 are consolidated under Master Docket 21 MC 97.

Cases concerning property damage and business loss arising out of September 11 are consolidated under Master Docket 21 MC 101.

There are also suits seeking relief for respiratory injuries sustained by cleanup, recovery and rescue crews who worked at the World Trade Center site and the surrounding areas in the weeks and months following September 11.

Cases brought by workers who sustained respiratory injury while working at the World Trade Center site have been consolidated under Master Docket 21 MC 100.

Cases brought by workers who sustained respiratory injury while working in the area surrounding the World Trade Center site have been consolidated under Master Docket 21 MC 102.

And there are sundry other cases, with jurisdictional challenges that have not yet been organized for administrative convenience.
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Okay, here's what I've since found out.

The $3.5 billion coverage was for all four of the buildings under the July 2001 lease (buildings 1, 2, 4 and 5).

The coverage was procured through 23-24 insurance companies.

Two companies - ACE Bermuda and XL Insurance, Ltd. - settled in Feb. 2002, paying a total of $365 million ($298 million by ACE and $67 by XL)

Three companies - Hartford, Royal Indemnity, and St. Paul Fire - brought motions for summary judgment seeking a declaration that they were subject to the "WilProp" language (which would mean that the terrorist attacks were one occurrence and not two) rather than the Travelers language. They were successful and the decision was upheld on appeal by the Circuit Court in September 2003. These three were subject, therefore, to a maximum liability of $112 million.

The remaining insurers were split into two groups for jury trials on the question of whether they were subject to the "one occurrence" or "two occurrence" language.

The first trial resulted in a verdict that 10 of those insurers whose liability totalled $1.9 billion, were subject to the WilProp language and thus their total liability was limited to $1.9 billion (three of the 13 insurers in this group were found to be liable to the "two occurrence" language so were added to the second trial group).

The second trial resulted in a verdict that the remaining insurers were indeed subject to the double occurrence language, so their $1.1 billion in coverage resulted in these insurers being liable for a maximum of $2.2 billion

Total potential payout, therefore, is capped at $4,577,000,000 for buildings 1, 2, 4, and 5.

I'm still looking for info on WTC7 but thought I'd post this now.

First jury trial
Verdict April 29, 2004 (no decision re Swiss Reinsurance)
http://www.law.com/jsp/article.jsp?id=1082923373947
http://www.realestatejournal.com/regionalnews/20040430-starkman.html

Swiss Re verdict May 3, 2004:
http://quote.bloomberg.com/apps/news?pid=10000085&sid=aIknDKhtrDSc&refer=europe

Second jury trial – December 6, 2004 - these insurers subject to double payment re 2 occurrences
http://insuranceletter.com/archives/insurance-letter/200412/msg00007.html#1
 
I couldn't find much on the $861 million figure for WTC7 except for on CT sites, but I was looking for a source because although I've heard the number bandied about for a long time, I never really knew where it came from. It appears to come from some old NY Times and WSJ articles and it seems as though it is probably accurate:

New York Times
http://www.nytimes.com/2003/01/16/nyregion/16DEVE.html

January 16, 2003

According to the financial plan Mr. Silverstein filed with the city, he had an $861 million insurance policy; the insurer was Industrial Risk Insurers, a unit of General Electric's Employers Reinsurance division.
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That's great investigating LashL, and many thanks.

Slightly off the topic here I know, but does the total payout boil down to the fact that (theoretically) the insurance payout on 1,2,4+5 was greater than the coverage owing to the "twin occurence" provision? In my non-legal mind this doesn't look like "reasonable".
If my house were insured for 200k (including against violent attack) and got hit twice in one day, I fail to see that I'm entitled to 400k for rebuilding.

I fully understand that this is a very trivial view of the legal complexities ;)
 
GlennB said:
That's great investigating LashL, and many thanks.
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You're most welcome.

Slightly off the topic here I know, but does the total payout boil down to the fact that (theoretically) the insurance payout on 1,2,4+5 was greater than the coverage owing to the "twin occurence" provision?
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Yes.

In my non-legal mind this doesn't look like "reasonable". If my house were insured for 200k (including against violent attack) and got hit twice in one day, I fail to see that I'm entitled to 400k for rebuilding.
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Your intuition is correct as set out in your analogy. The double occurrence issue would likely not have arisen had the policies been covering a single building that was hit twice because the destruction of the single building was total and the total payout would have been the aggregate of the policy limits.

However, in this case, there were actually two separate events involving separate buildings, which is what gave rise to the issue.

That's what makes it reasonable, but only with respect to the policies that defined "occurrence" in a particular way, and not with respect to the policies that defined "occurrence" in a manner precluded additional proceeds for multiple occurrences.
 
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That was excellent work LashL, it looks like I was mistaken in my recollection that Swiss Re was the lead reinsurer for the twin towers (with all the other reinsurance companies being retrocedants off the Swiss Re policy) so I just focused on the Swiss Re info. Sorry for the confusion GlennB, my post about the Swiss Re policy was just for the towers, and I guess 4 and 5, not WTC7.
 
TriangleMan said:
That was excellent work LashL, it looks like I was mistaken in my recollection that Swiss Re was the lead reinsurer for the twin towers (with all the other reinsurance companies being retrocedants off the Swiss Re policy) so I just focused on the Swiss Re info. Sorry for the confusion GlennB, my post about the Swiss Re policy was just for the towers, and I guess 4 and 5, not WTC7.
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Your recollection wasn't that far off, TriangleMan. SwissRe was the lead reinsurer initially, and had the most money at stake ($877 million).

An insurance brokerage company called Willis was tasked with getting the insurance coverage in place, and its VP, a man called Boyd, was the person who worked on securing insurance company buy-ins, in which each insurer would buy a layer of coverage or a portion of a layer of coverage. They were negotiating on the basis of the Willis form which included a definition of "occurrence" as:

"'Occurrence' shall mean all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes. All such losses will be added together and the total amount of such losses will be treated as one occurrence irrespective of the period of time or area over which such losses occur."
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That is the language that saved approximately half of the insurance companies from having to pay double the limits of their policies on the basis of the "two occurences" argument.

But then Travelers got involved and became the primary insurer (the company who insured the first layer of coverage) and insisted that other insurers "follow its form". The Travelers form did not define "occurrence" and did not, therefore, limit its potential liability in the way that the Willis form language did.

So, ultimately, the companies whose policy language was aligned with SwissRe's (and were negotiating on the basis of the Willis form) won on the "one occurrence" issue; the companies whose policy language was aligned with Travelers lost on that issue.
 
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