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Date Posted: 06:16:08 12/08/04 Wed
Author: bfny
Subject: very good, not 100%, but very good
In reply to: Lawshark 's message, "I believe it was..." on 20:18:37 12/07/04 Tue

I have gone through this multiple, multiple times with multiple, multiple press people. A guy at CNN turned out to be the most dense. I explained it to him for 15 minutes; and half an hour later, he shot me an email encapsulating the thing, which was totally wrong; I had to get back on the phone with him and explain it once again. Then I turned on CNN Headline News when I got home and he still managed to butcher it. Here's the deal in a nutshell:

24 insurers bound themselves to a $3.55 billion insurance policy covering the entire WTC complex - the twin towers, the underground mall, the other two buildings, etc. Larry sued to get double payment from all the insurers based on the premise that two planes hit two separate towers and each tower fell independently of the other - i.e. if just one plane had hit one tower, the other tower would still be standing today. In his mind, that is two occurrences entitling him to the maximum recovery - maximum recovery defined as what it will cost to replace all of the WTC elements - which is estimated to be between $7-9 billion.

The insurers claimed that it was one coordinated attack and thus only subject to a single payout of $3.55 billion - per the policy limit.

The jury agreed with Larry with respect to nine of the insurers who had bound to $1.1 billion of the $3.55 billion policy (no one insurer would ever put $3.55 billion at risk on one policy, especially on a property that had previously been attacked by terrorists).

You can stop reading here if you want because it really gets technical now. You will notice that only nine of the 24 insurers are at present liable for the double payment. The others are liable only for one. Why, you ask? Well, Larry signed his lease on the WTC just six weeks before the attack. The insurers had agreed to provide coverage but the policies were not yet finalized - which is pretty standard in the industry. They were still negotiating the final forms and wording on 9/11. Now, there was one particular policy form, call the WilProp form, which Larry's insurance brokers had sent to all the insurance companies as the starting point. That form is the only in the industry that includes a very narrow definition of an occurrence. The courts had already decided that under this definition, what happened on 9/11 was one occurrence. So, there was a first trial, before this one, in which a jury determined if on 9/11, the insurance companies were bound to the WilProp form or some other form that did not specifically define occurrence. The jury in that case found that most of the insurers were bound to the WilProp form and thus off the hook. So, a little more than two-thirds of the insurers, representing about $2.4 billion of coverage do not have to pay twice.

Now the fun starts. the nine insurers who lost the second trial will likely appeal the verdict. And we now are moving forward with an appeal of the first verdict in an attempt to stick all those other insurers with a double payment.

Assuming appeals are not successful, Monday's decision means that Larry has an extra $1.1 billion in Monopoly money with which to rebuild part of the WTC.

>the one insurer. They claimed that the attack on the
>two trade center towers constituted ONE
>attack/incident.
>
>Under the WTC insurance policy, the limit of coverage
>was maxed at $1.1 billion PER insurable event.
>
>If the attack was ONE event...the insurer owes only
>$1.1 billion.
>
>If it was TWO separate occurences...then the damages
>were capped at $1.1 billion for each attack...$2.2
>billion.
>
>Bud's client just secured the extra billion.

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