Put the people first, says insurance chief

One of the leading figures in UK insurance is calling on the rest of the industry to put the needs of policyholders before business interests in the wake of the terrorist attacks. Sandy Leitch, UK chief of Zurich Financial Services, Europe's third-largest insurer, said the volume and complexity of the claims mean it could be many months before realistic estimates can be made.

"This is the biggest catastrophe loss since records began," he said. Zurich's own liabilities are ex-pected to run to £280m. But Mr Leitch added that there should be no in-fighting in the industry over who is responsible for claims. "The industry has to come together and deliver to policyholders what it said it would. The cost will be huge. But that is what clients pay for and it is our job to deliver what we said we would during times of trauma."

An avalanche of lawsuits is expected against airlines, the security firms and government agencies that run airports. On top will be business interruption and property claims, along with workers' compensation policies.

Lloyd's of London will shoulder a big part of the costs because some of its underwriters provide cover for United Airlines and American Airlines, two of the companies involved. Lloyd's is also partly responsible for cover of the World Trade Centre's twin towers, thought to be insured for $3.2bn (£2.2bn).

The complexity of the situation could be increased if claims exceed insurance limits. United Airlines and American Airlines are understood to have a cap on liabilities of $1.5bn and $2bn per plane respectively, says Lloyd's List newspaper. The compensation awarded to victims' families and affected businesses is likely to exceed that significantly.