The events of September 11, 2001 drastically changed the world in ways more than we can even imagine. But a lawsuit that was filed by Larry Silverstein, the developer who owned the WTC towers at the time of the terrorist attacks, against the insurance company asking for 7 billion dollars. The lawyers for the insurance companies, one of them being Swiss Re, argued that Mr. Larry Silverstein was only qualified to receive 3.5 billion dollars because that was real face value of the insurance coverage for the two towers.
But Larry Silverstein’s lawyers argued that since there was a 17 minute difference between the two plane crashes into the towers, the attacks constituted as two entirely different occurrences according to the terms mentioned in the insurance contract. Therefore, Larry Silverstein demanded that the insurance companies pay him the double of what the actual insurance coverage was, which amounted to 7.1 billion dollars.
The case was fought in court between the parties based on their different interpretations of the term “occurrence” with Larry and his lawyers arguing that it referred to the number of attacks whereas the insurance companies argued the exact opposite. The court split the insurance companies into two groups with two different trails each to determine whether the events of September 11 constituted as one occurrence or two according to the insurance policies.
The first trial ended up in the favor of the insurance companies in which the jury decided it was just one occurrence hence the developer will only receive the face value of the insurance coverage. Silverstein appealed against it and lost. But the second trail returned a judgment in Larry Silverstein’s favor declaring that there were two occurrences. So, in the insurance policies involved in the second trail, Larry got twice the face value insurance coverage.
The total amount Larry Silverstein was qualified to receive from the insurance companies totaled 4.6 billion dollars. Many conspiracy theories also emerged during the time of this trial, as apparently, Mr Larry had acquired the lease for the twin towers weeks before the attacks. Some people construed theories that Mr Larry Silverstein knew about the attacks, that is why he bought the lease in order to make money off insurance claim.
Anyhow, ever since the attacks and this case, the insurance policies in New York City and soon in major cities around the world had to be rewritten from scratch as before 9/11 there was no terrorism policy. But ever since then, every sale agreement, loan and insurance policy includes a clear terrorism policy.
This case was a landmark case in terms of real estate as it changed the insurance industry drastically, at least in major cities around the world, by forcing them to reevaluate their policies from scratch. Lawyers, banks, insurances companies everyone had reevaluate their policies and change the way they conducted their business in order to survive. Change in insurance policies, and increase of terror threats led to increased premiums, increasing the costs of purchasing, renting or loaning out properties.
It is ridiculous how one incident and one lawsuit can set such a precedent that affects so many industries simultaneously. Lawyers working during those days had to rewrite every single contract from scratch just to make sure their clients were covered in case of another unfortunate event.