Twin Towers ruling lifts Lloyd's

LLOYD'S syndicates have been saved hundreds of millions of pounds in payouts on the World Trade Centre after a jury in New York found that the attacks on the Twin Towers by two hijacked planes was only 'one event'.

Developer Larry Silverstein, who leased the WTC, had brought the case arguing that he was owed $7bn (£3.8bn) by his insurance company - double his $3.5bn policy - because each plane crash represented a separate insured event.

That argument was dismissed by the jury with respect to about $1bn of Silverstein's policy held by six insurance companies including at least 15 Lloyd's syndicates, which had the second-biggest portion of the coverage.

But the decision has left doubts hanging over Zurich-based insurance giant Swiss Re's component of the cover. Jurors found that most of about a dozen insurers had signed insurance forms that defined the towers' collapse as one event.

While Silverstein will not be able to collect double from those companies, the position of Swiss Re, the WTC's biggest insurer, with liabilities of some $877m, is still unclear as the jury failed to reach a verdict on that policy, despite being sent back by the judge. They will resume deliberations on Monday.

The developer could still recover as much as $5.5bn if the decision is unfavourable for Swiss Re and three other smaller insurance companies Zurich American, Royal Indemnity and Twin City Fire Insurance. If jurors find against the four, there will be a second trial to determine whether they owe two payouts - one for each tower. A third procedure would determine exactly how much the insurers must pay.

'This is an important case. This trial involved a great investment of a great deal of time, effort and expenditure,' Judge Michael Mukasey said as he exhorted the jurors to reach a decision. They have deliberated for seven days in the trial, which has lasted almost three months.

Silverstein leased the World Trade Centre just six weeks before the terrorist attacks. He says he needs $7bn to pay for the ambitious redevelopment plans he has for the 16-acre site in lower Manhattan which would include a memorial to the 2,800 victims of the attacks, several office buildings and a 1,776-foot glass-fronted skyscraper to be called the 'Freedom Tower'.

Lawyers for victorious insurers welcomed the verdict. 'We had a very clear and plausible story to tell,' said Ken Erickson, who represented Lloyd's, which carried about $719m of the policy.

A spokesman for Silverstein said in a statement that he would not comment until the jury completed its deliberations.