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69 Def. Counsel J. 169 (2002)
Twin Towers: The 3.6 Billion Question Arising from the World Trade Center Attacks

handle is hein.journals/defcon69 and id is 171 raw text is: Twin Towers: The 3.6 Billion Question Arising from the World Trade Center Attacks Was it one occurrence or more than one? There are complexities galore that are bound to arise in the insurance context By Michael F. Aylward IN THE aftermath of the September 11, 2002, attacks on the World Trade Center in New York City, various questions have been raised with respect to the availability of insurance coverage to pay for losses caused by the attacks. Issues have surfaced with respect to the appropriate period of business interruption, the impact of civil authority wordings in the insurance poli- cies, and the potential impact of war risk exclusions, just to name a few. Yet none of these questions promises to have as dra- matic a financial impact on the insurance industry as the issue of whether collective acts of terrorism should be viewed sepa- rately or together in evaluating the num- bers of occurrences or policy limits available to satisfy covered losses. The outlines of this dispute are already apparent. Several cases are pending in the U.S. District Court for the Southern Dis- trict of New York between a consortium of investors led by Larry Silverstein, which acquired a 99-year lease to operate the World Trade Center only weeks before the disaster, and its property insurers with re- spect to whether the total available insur- ance for damage to the buildings within the WTC complex is the $3.5 billion policy limit, as the insurers contend, or, as the in- sured contends, a separate limit is available for each tower. Complicating an early analysis of these issues is a recent ruling of the New York Court of Appeals that seems to offer some- thing for everyone. In Travelers Casualty and Surety Co. v. Certain Underwriters at Lloyd's of London,' the court ruled that a general liability insurer could not aggre- gate separate pollution incidents for rein- IADC member Michael F. Aylward is a senior partner in the Boston office of Morrison Mahoney & Miller LLP. He is chair of the Defense Research Institute In- surance Law Committee and a member of DRI's Board of Directors. He is a 1976 graduate of Dartmouth College and a 1981 graduate cum laude of Boston Col- lege Law School. surance purposes. Insofar as the losses in- volved discrete pollution problems that had occurred in different parts of the United States at diverse times between the 1920s and the 1990s, the court ruled that they could not be treated as having any common causative origin. The multiple events analysis in Travel- ers would seem to support the insured's position in the WTC dispute. Yet, Travel- ers, as with earlier New York precedents, arguably also sets forth a blueprint for treating the events of the twin towers at- tacks as a single event for insurance pur- poses. In particular, the Travelers court's focus on whether the underlying claims were closely linked in time and space, while mandating multiple reinsurance events in that case, presumably would sup- port a finding that adjoining buildings that toppled within minutes of each other as a practical and physical consequence of two coordinated blows to their structure would constitute a single occurrence. What are the likely parameters of this debate? There are few clear guideposts in this area of the law. How many occur- 1. 760 N.E.2d 319 (N.Y. 2001).

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