SW Legal studies in Business

9/11 Attack on World Trade Center Held One Occurrence
Description Trial court held that insurance binders are the same as policies and so provide the same coverage as the policies would when they issue. The court also held that the attack on the two World Trade Center buildings was one occurrence for purposes of insurance.
Topic Insurance
Key Words Binders; Policies; Coverage; Occurrence; Losses; Terrorist Attack
C A S E   S U M M A R Y
Facts At the time of the terrorist attack on the World Trade Center on 9/11, over twenty insurance companies had signed binders that obligated them to provide property damage insurance, but they had not issued formal insurance policies. Insured property owners sued for a declaration that the binders obligated the insurers to cover losses. The court was also asked to determine if the attacks on the two buildings was one occurrence or two separate occurrences.

A binder is "a short method of issuing a temporary policy for the convenience of all parties, to continue until the execution of the formal one." Hence, when a binder is signed, "the contract of insurance is closed and the binder becomes in effect the same as a regular insurance policy." Under the policies, occurrence is defined to "mean all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes. All such losses will be added together and the total amount of such losses will be treated as one occurrence irrespective of the period of time or area over which such losses occur." The attack of the two airplanes on the two buildings, 16 minutes apart, was one occurrence.

Citation SR International Business Insurance Co. v. World Trade Center Properties, --- F.Supp.2d --- (2002 WL 31118331, S.D., N.Y., 2002)

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