CLAIM FROM 9-11 OPPOSED:

Responding to a new claim by the Port Authority of New York and New Jersey that it is separately insured for a $2.1 billion “shortfall” in Silverstein property insurance following the Sept. 11, 2001, terrorist attack, a group of insurers has filed a complaint in federal court contending the claim is without merit.

The Port Authority sold much of the World Trade Center complex in July 2001 to a group of investors led by Larry Silverstein under 99-year lease agreements. The Silverstein interests are required to rebuild the destroyed property, and they also insured the property for $3.546 billion–more than twice the amount of insurance previously maintained on the property.

The Port Authority joined the Silverstein interests in litigating in the New York federal court for more than three years their rights to coverage under the Silverstein insurance. Citing the outcome of that litigation, the Port Authority recently stated that there is at least a $2.1 billion “shortfall” in the amount necessary to rebuild 10 million square feet of commercial space at the World Trade Center.

The group of insurance underwriters opposing the claim includes Underwriters at Lloyd’s, Axa Global Risks Ltd., Copenhagen Reinsurance Company, Great Lakes Reinsurance (UK) Ltd.; Houston Casualty Company, QBE International Insurance, Sirius International Insurance Corp., Wurttembergische Versicherung AG and Zurich Specialties London Ltd.

The Port Authority maintained its own insurance on other property at the site and throughout the New York metropolitan area and has already received payments of $950 million from its insurers for damage on 9/11 to WTC property not controlled by the Silverstein interests, according to lawyers for the insurers. The Port Authority now claims, however, that this insurance separately covers its interest in the supposed “shortfall” in the Silverstein property insurance and that it is entitled to double the $1.5 billion limit of its insurance–or a total of $3 billion.