New York, NY, May 5, 2004 – LAWFUEL – Baker & McKenzie lawyers in London and New York represented QBE International Insurance Ltd. in a multibillion-dollar case addressing property insurance coverage of the World Trade Center attack. A jury reached a partial verdict in the case last Thursday, and reached a further verdict on Monday, holding unanimously that the terrorist attack on the World Trade Center should be treated as a single occurrence, and that a single insurance limit is thereby appropriate, for all but three insurers involved in the first phase of the case. The insured parties, led by WTC leaseholder Silverstein Properties, unsuccessfully argued that they should collect two limits because a different wording applied.
After a ten week trial, the jury found that the victorious insurers, including QBE International Insurance Ltd., bound their coverage based on a policy form known as the WilProp 2000 form. This form (named by broker Willis Group) had already been determined by the New York Courts to define an “occurrence” to require a finding that the World Trade Center attack, in which two planes hit the World Trade Center, was a single “occurrence” under the terms of the WilProp 2000 form, based upon which the successful insurers bound. Together the insurers found to have bound on the WilProp form in this trial represent about US $1.93 billion in coverage.
QBE was represented by Baker & McKenzie lawyers Grant Hanessian and James Torre of the Firm’s New York office, and Peter Schwartz and Jane Colston of the Firm’s London office.
“This trial should be a wake-up call to most major commercial policyholders, intermediaries and insurers to make sure that policy documents timely, fully and accurately reflect what the parties agreed at point of contract – particularly where huge high profile exposures are involved. Otherwise, the Courts will have to step in again to interpret the bargain which the parties actually made,” said Hanessian.
Three insurers, representing approximately US $176 million in exposure, were found not to have bound on the WilProp form and will proceed to the second phase of the trial for further consideration on whether, under the terms of their particular coverage, the attack constituted one or two “occurrences.” They will be joined in the second phase of the trial by certain other insurers that did not contend that they bound on the basis of the WilProp form and did not therefore participate in phase one.