Allianz “upset” about U.S. court ruling in 9/11 insurers’ case: ARC panelist

Allianz was perhaps the only insurer to finalize exclusions in its World Trade Center (WTC) policy coverage prior to the building’s 2001 destruction in a terrorist attack, but ended up paying out anyway because a lower U.S. court didn’t recognize its exclusions for “mischief” or “malice.””Allianz is very upset,” panelist Ali Reza of Exponent (Failure Analysis Associates) told a seminar launching The ARC Group Canada in Toronto. The ARC Group is a network of independent law firms across Canada. They have joined together to deliver services to insurers, self-insured companies and other companies requiring assistance with insurance-related matters.ARC’s keynote speaker, Reza, the corporate vice president and chief engineer of Exponent, delivered expert testimony in the trial between WTC controller Larry Silverstein and the companies insuring the World Trade Centre losses after 9-11.Reza said Allianz was the only World Trade Center insurer to finalize its coverage exclusions before two hijacked commercial airliners hit both towers of the WTC, causing both towers to collapse and kill more than 3,000 people.Allianz’s policy actually included exclusions for events arising out of “mischief” or “malice,” Reza added. But the policy terms did not explicitly use term “terrorism,” he added, and so the U.S. lower courts ruled the Allianz’s policy exemptions did not apply to the 9-11 incident. Reza was answering a question from an audience member, who wondered aloud why the WTC insurers didn’t appear to include “terrorism” policy exclusions especially in light of an earlier terrorist attack against the WTC buildings in 1993. Reza noted most insurers had issued binders, but had not yet finalized their policy wordings before the Sept. 11, 2001 attack.