Agreement with two insurers on World Trade Center
Countries: United States
Westfield America Trust announced today that settlement had been reached with two of the companies that had insured the World Trade Center (WTC) complex.
Under the settlement with ACE Bermuda Insurance Ltd. (ACE) and XL Insurance Ltd. (XL) all parties with interests in the WTC complex – affiliates of Silverstein Properties, Westfield America Trust, and the Port Authority of New York and New Jersey – will receive a total of US$365 million within 30 days.
Westfield Director of Funds Management, Mr Victor Hoog Antink, said the proceeds would be lodged in an interest-bearing account until a decision on the future of the World Trade Center site was made.
The overall insurance coverage for the WTC (including the retail complex) totals US$3.5 billion “per occurrence” of which ACE Bermuda provided $298 million and XL $67 million “per occurrence”.
While the insured parties are pursuing their claims on a multiple occurrence basis with the other insurers, the settlement with ACE and XL was prudent due to the specific definition of occurrence in their policies.
Mr Hoog Antink said that under these circumstances it was sensible to reach settlement given that the insurers had agreed to pay out their entire single occurrence obligation immediately, thereby avoiding a lengthy settlement period.
Westfield remains confident that it has adequate insurance coverage and that the loss of the WTC will not have a material impact on the distribution of Westfield America Trust. Westfield’s investment was fully insured for loss of both capital and income, including for terrorist attack.