World Trade Center insurance dispute settled for $2 bn


New York : A group of seven major insurance companies has agreed to a $2 billion payment to settle a long-running dispute over insurance claims for New York's destroyed World Trade Center, clearing the way for the redevelopment of the iconic site, reports said Thursday.

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The seven-strong group consisted of Allianz Global Risk, the Travelers Companies, Zurich American, Swiss Re, Employers' Insurance, Industrial Risk Insurers and Royal Indemnity, The New York Times reported.

The deal concludes a five-year legal battle between Larry Silverstein, who leased the WTC site just six weeks prior to the Twin Towers' destruction in the Sep 11, 2001 terrorist attacks, and insurers.

The settlement brings to $4.5 billion the amount awarded to Silverstein in insurance settlements, and provides a green light for the $9 billion redevelopment of the site to proceed.

All parties to the deal signed a confidentiality clause barring them from revealing how much each insurer had paid out.

The settlement was the largest in industry history, said Andreas Shell, claims crisis coordinator for Allianz, adding that his company was "extremely happy with the result".

The proceeds of the settlement will be split between the Port Authority of New York, which owns the site, and Silverstein Properties, which is spearheading its rebuilding.

Officials said the deal would enable them to obtain private financing for the project, which involves the $3 billion "Freedom Tower" as well as retail and other office towers, the newspaper reported.

"The unsettled insurance claims were the last major barrier to rebuilding and have been bitterly and intensely contested for almost six years," said New York Governor Eliot Spitzer, who in recent weeks had taken part in talks aimed at ending the dispute.

"This means we can now fund construction, access the financial markets and move on to what should be our primary focus: rebuilding," Spitzer told The New York Times.

As part of the deal, the Port Authority and Silverstein had to relinquish their claim that the companies owed more than $500 million in interest resulting from delays in making the payments. The insurers, in turn, abandoned their claim that they did not owe the money until the project was completed, in 2012.

At the time of the 9/11 terrorists attacks some two dozen insurers were engaged in an uncompleted deal with Silverstein to provide $3.5 billion in coverage for the WTC.

Conflict ensued amid disputes over which policy was in force at the time of the attack, and over claims by Silverstein that he was entitled to a twin payout as two jetliners had been involved in the attacks.

In 2004 following lengthy proceedings a court ruled that the developer was owed a maximum $4.6 billion, less than the $7 billion he had sought.