The builders of the World Trade Center site and seven insurers have reached a $2 billion settlement that ends all outstanding legal battles over its multibillion-dollar policy, state officials said Wednesday.
Gov. Eliot Spitzer and state Insurance Superintendent Eric Dinallo announced the settlement after leading two months of talks with the insurers, trade center developer Larry Silverstein and the site’s owner, the Port Authority of New York and New Jersey.
The $2 billion, added to $2.55 billion already paid out since the Sept. 11, 2001, attacks that destroyed the trade center, is about $130 million less than the amount awarded to rebuild the site after a trial in 2004.
Spitzer called the insurance dispute, which had cost parties on both sides hundreds of millions of dollars, “the last major barrier to rebuilding.”
The deal “ensures that the Port Authority and Silverstein Properties will have the financial resources to meet their obligations and rebuild at the World Trade Center site in a way that will make all New Yorkers proud and fuel the revitalization of lower Manhattan,” the governor said.
The insurers involved include Swiss Reinsurance Co., which held the largest policy on the trade center; Allianz Global Risks U.S. Insurance Co., the former Royal Indemnity Co., Zurich American Insurance Co., Travelers Companies Inc. and Employers Insurance of Wausau.
Silverstein, who leased the twin towers weeks before they collapsed, took out a $3.5 billion policy with dozens of insurers. He went to court after the attacks, arguing that he should receive two payouts because the two hijacked planes that crashed into the towers represented two attacks instead of one.
Silverstein was awarded $4.6 billion in 2004; two juries decided that some of the insurers had to pay twice the policy because the companies’ different insurance policies carried different wording about what would constitute multiple events. The insurers have been in court recently to determine exactly how much they would pay.
The money represents more than half of the funding needed to rebuild the trade center site. Silverstein was originally responsible for rebuilding five office towers, but a year ago agreed to split the rebuilding — and the insurance money — with the Port Authority, which will build the 1,776-foot Freedom Tower and another planned tower.
The Port Authority and Silverstein sued several insurers this year who refused to recognize the agreement.
Wednesday’s agreement ends all court cases; the insurers will not disclose exactly how much each company will pay of the remaining $2 billion, under the agreement.
Silverstein on Wednesday thanked Spitzer and Dinallo for their intervention, saying they “deserve huge credit for recognizing the importance of settling all outstanding insurance issues, and their tireless work made sure we got it done.”
Roger W. Ferguson, chairman of Swiss Re America Holding Corp., said the deal “fairly and conclusively” resolves the company’s case.
An Allianz official, Andreas Shell, said the insurer is pleased that the trade center case is over. “We, along with the nation and especially the residents of New York, look forward to seeing the rebuilding of the World Trade Center site,” Shell said.