In The World Trade Center Property Insurance Trial: Lessons Learned?, liability insurance expert witness Akos Swierkiewicz writes:
Jurors rendered verdict in favor of ten, and against three of the 13 insurers. Regardless of the verdict, there are no winners in this case. The causes of this litigation could have been avoided and the fact remains that none of the parties to this case are blameless.
However, it is not the purpose of this article to castigate anyone involved in the placement and negotiation process, rather, by highlighting key issues that were the subject of the litigation, it is to identify some of the lessons learned or should be learned and to prompt insurers, brokers and risk managers to reexamine their role and involvement in the insurance placement and negotiation process.
Based on trade press reports, the following are some of the key issues that emerged during the trial:
The broker’s intention to switch from the WilProp form, that was part of the underwriting submission, to the Travelers form was not communicated properly to the insurers
None of the insurers identified the applicable form in their bindersSeveral insurers waived their right to approve the form;
On 9/11/01, the final policy form has not been agreed upon and the broker was still analyzing the Travelers form
Silverstein’s risk manager authorized to bind on the basis of the Travelers form in July without obtaining and reviewing it and he did not have copy of it on 9/11/01
* When the form was requested from Silverstein’s risk manager on 9/12/01, he released the WilProp form. None of the parties adequately documented their negotiations.