Silverstein World Trade Center Insurance Case Goes to Jury April 19 (Bloomberg) -- World Trade Center leaseholder Larry Silverstein's claim that his insurers owe him almost twice their policy limits, or as much as $6.8 billion, based on a switch in insurance forms, went to a jury in U.S. court in New York after a judge spent 41 minutes instructing them on applicable law. Silverstein's insurers, led by Swiss Reinsurance Co., filed suit one month after the Sept. 11 terrorist attacks, saying they owed him no more than $3.55 billion, the amount of insurance he bought in July 2001 when he leased the complex for 99 years from the Port Authority of New York and New Jersey. The developer said he may be owed twice that, based on a change in policy forms that may recognize the attacks by two hijacked jets as two losses. In his charge to the six-man, five-woman jury, U.S. District Court Judge Michael Mukasey told them their job is to determine whether the form insurers say was in place -- a Willis Group Holdings Ltd. document known as Wilprop 2000 -- governed each insurer's agreement to provide coverage on Sept. 11, without sympathy or prejudice toward Silverstein or the insurers. The trial is the first of three possible proceedings that will determine how much Silverstein will get to rebuild commercial office space at the trade center site, including the proposed 1,776-foot Freedom Tower. New York Governor George Pataki has championed the rebuilding of Ground Zero as critical to lower Manhattan's economic recovery. The first proceeding involves 13 of the 22 members of Silverstein's insurance pool, including Swiss Re, Lloyds of London -- which provided 19 percent of the coverage -- Chubb Corp. and Employers Insurance of Wausau. All 13 claim to have offered insurance based on the Wilprop form, which was circulated by the developer's insurance broker, Willis Group, the month before he signed the lease. `Occurrence' Definition The Wilprop form contains a definition of the word ``occurrence'' that would limit Silverstein to no more than a $3.55 billion total-loss payment. Silverstein and Willis say that they switched each insurer to another form, written by Travelers Indemnity Co., which has no such definition, and may entitle Silverstein to double payouts on the basis that two jets hitting each of the twin towers constitutes two different occurrences. According to the case presented by Silverstein's attorney, Herbert Wachtell, Swiss Re received the Travelers form in an e- mail three days before its representative signed a revised placing slip. Barry Ostrager, the attorney for Zurich-based Swiss Re -- the world's second-largest reinsurer and holder of 22 percent of Silverstein's coverage, the largest share -- said the e-mail wasn't explicit enough to constitute a change in operative forms. Except for one insurer, Allianz AG, which isn't in this phase of the case, none of the insurers had final insurance contracts on Sept. 11. Waived Right? Wachtell said Lloyd of London's member insurers all waived their right to specify a policy form, and the others were told in conversations with their underwriters that Willis had switched the form to Travelers. Lawyers for the insurers, including Lloyds's David Boies, said Willis never documented the switch and never sent them the Travelers form before the attack took place. The 10-week trial is to be followed by a second phase involving Travelers, Allianz, two other insurers who didn't accept the Wilprop form, and any insurer that loses the first phase, to determine whether the trade center attack was one occurrence or two. The third phase would set damages. The case is SR International Business Insurance Co. Ltd. v. World Trade Center Properties LLC et al, 01-CIV-9291. Insurers, Coverage Amounts The plaintiff insurers in the first phase of the trial, their base of operations and the amount of their policies on a single occurrence are: Swiss Reinsurance Co. of Zurich, Switzerland, $778.1 million. Lloyds of London Syndicates, U.K., $662.8 million. Federal Insurance Co., a unit of Chubb Corp., U.S., $254.3 million. Royal Specialty Underwriting Inc., U.S., $178 million. Swiss Reinsurance UK, U.K., $83.3 million. Employers Insurance of Wausau, U.S., $64.9 million. Zurich America Co., U.S., $45.7 million. Great Lakes Reinsurance PLC of London, U.K., $35 million. Wurttembergische Versicherung AG, U.K., $16 million. QBE International Insurance Ltd., U.K., $12.5 million. Lexington Insurance Co., U.S., $5 million. Copenhagen Reinsurance Co., U.K., $4 million. Twin City Fire Insurance Co., U.S., a unit of Hartford Financial Services Group Inc., $2.5 million. Houston Casualty Co., U.K., $2.4 million.