ICSC: International Council of Shopping Centers

Court rules in favor of Silverstein, Westfield over World Trade Center insurance

Westfield and Silverstein, which both signed 99-year leases to the property just months before two hijacked planes were crashed into the buildings, have challenged several insurers who insist the attack should be considered one event. The insured, which include others besides Silverstein and Westfield, could receive up to $6.7 billion if it is ruled that the attacks were two events, as opposed to $3.6 billion for one event.

Allianz is responsible for $432.6 million per occurrence, the judge ruled, or $865.2 million. The company had claimed in a motion that because coverage of acts of "vandalism and malicious mischief" taking place within any 72-hour period is treated as one event, the same should apply to its World Trade Center policy. Judge John S. Martin of the U.S. District Court in New York City responded, "It cannot be said that the ordinary businessman would consider an act of wanton terrorism such as the attack on the World Trade Center to be an act of malicious mischief or vandalism."

Silverstein spokesman Howard J. Rubenstein said he expects future rulings with other Trade Center insurers to go the developer’s way.

"We remain confident in our position that the crashes of two separate planes into two separate buildings at two separate times entitle Silverstein and other insureds to recover on a two-occurrence basis," he said.

Silverstein and Westfield lost a round last year when a court defined the attacks as a single event for insurance purposes. The insured have filed an appeal of that ruling, and a March 24 hearing has been scheduled at the U.S. Court of Appeals for the Second Circuit, New York City.

Westfield holds the lease for the 400,000-square-foot mall that lay at the foot of one of the Trade Center’s towers, and Silverstein has the lease on the office space in both buildings. No one has disclosed how any recovered money would be divided among the insured.