WTC owner Silverstein appeals to insurers to pay up

Larry Silverstein, the American property magnate who bought the World Trade Centre in July, has appealed personally to insurers across the world to pay up on a proportion of the $3.4bn (£2.3bn) policy which covered the twin towers.

Mr Silverstein, who saw half his eponymous empire crumble with the collapse of the World Trade Centre, addressed insurers via video link from New York on Tuesday, asking them to extend some funds to cover the hefty clean-up bills which his company must pay.

The appeal came after a serious dispute emerged between Mr Silverstein's brokers, Willis, and insurers over whether the terrorist attacks on 11 September constituted one or multiple events.

According to one British insurer "there is likely to be a very strong debate over whether this is seen as one or two events. Mr Silverstein thinks it was two". A spokesman for Mr Silverstein would not comment on the contents of the address.

While the debate over liabilities is hammered out, insurers are preparing in the next few days to write cheques for some of their liability, so that Silverstein Properties can pay the costs of cleaning up the debris in lower Manhattan.

But insurers have not backed down from the wider debate over their total liabilities, which has been triggered because the final policy wording was not written when the attacks took place.

One senior insurance broker said insurers' view that the devastation was a single event was reinforced by the way the original policy was written in July, when Silverstein took over the towers from the Port of New York and New Jersey Authority.

"The World Trade Centre was looked at as one unit, with excess cover bought on top of a primary policy. If [it had been seen as] as two units, it would not have needed its top layer of cover because the total loss on each tower would have been much less than the total loss on both," the broker said.

It is understood that the US insurer Travelers was the main underwriter on the primary policy, thought to cover about the first $500m of losses, and a UK company was the lead insurer on the excess, which was sliced into chunks right up to the top level of potential catastrophic losses.

Separately, the ratings agency Fitch estimated Lloyd's of London's exposure would be £1.7bn net, with gross liabilities of up to £7bn. This compares to the £1.3bn net Lloyd's said it would have to pay out.

The Financial Services Authority yesterday held a meeting with the police to discuss further how financial institutions could help track down evidence of money laundering and other terrorist activity. Carol Sergeant, managing director of regulatory processes at the FSA, said: "It is very clear from our contacts that the firms we regulate want to play their part as fully as they can."