On the morning of September 11, 2001, two airplanes, American Airlines Flight 11 and United Airlines Flight 175, collided into the north and south towers (the main “Twin Towers”) of the World Trade Center complex in New York City. Shortly thereafter, as a result of fires caused by burning jet fuel and falling debris, the Twin Towers collapsed (south tower – 9:59 am; north tower – 10:28 am), resulting in significant damage to remaining five other towers that made up the complex and the buildings in the vicinity. The collisions were the result of acts of terrorism perpetrated by a foreign terrorist group.
Larry Silverstein, the leaseholder of the WTC Properties, entered a 99-year lease of the complex just a few months prior to the attacks. To protect his lease, Mr. Silverstein had multiple layers of insurance placed on the complex through various insurance companies. After the attacks, Mr. Silverstein sought to collect on the various insurance policies, arguing that the attacks were two separate instances of an “occurrence” under the respective policies and as such, the policies should cover the resulting damage separately. The insurers challenged Mr. Silverstein’s position (some of the insurers argued that the attack constituted one continuous attack, although multiple planes were involved). Litigation ensued.
Additional information regarding the WTC litigation:
Discuss whether Mr. Silverstein had a valid claim and the impact of coverage on commercial insurance coverage. Your response should include what you have learned about commercial property insurance in the Unit and the applicable insurance provisions that may have resulted in coverage for the structures.