Silverstein case (World Trade Center, one or two occurrences)

In July 2001, Silverstein Properties took a 99-year lease on the Twin Towers and placed a property and business interruption program of about $3.5 billion per occurrence, spread across some two dozen insurers. On September 11, most policies had not been issued: the placement rested on binders, and the whole case turned on which wording should attach to them. The WilProp form, drafted by the broker Willis, defined an occurrence as all losses or damages attributable directly or indirectly to one cause or to one series of similar causes. Under that form, two impacts seventeen minutes apart make a single loss. Other insurers had bound on their own form, Travelers' in particular, or on no form at all, and the word occurrence was then left to New York law. The federal court in Manhattan decided in waves: Swiss Re was held to WilProp, hence one occurrence; then a jury, in December 2004, found two occurrences for nine insurers. The Second Circuit affirmed both outcomes in October 2006. The matter closed with a global settlement in May 2007, for a total recovery of about $4.55 billion. Here the aggregation clause, written before the loss, made more than a billion dollars of difference, and it was the date on which each insurer agreed a wording, more than the wording itself, that settled its fate. The market drew from it the contract certainty discipline, which requires the wording to be agreed before inception.