Silverstein Properties--along with the Port Authority of New York and New Jersey which owns the WTC complex--has been sued for damages by family members and other representatives of those who died in the Twin Towers.

Mr. Silverstein is also seeking a declaration from the court that Schaumburg, Ill.-headquartered Zurich American Insurance, a unit of Zurich Financial Services Group, must extend liability coverage to the Port Authority of New York and New Jersey as well.

Mr. Silverstein is already battling more than 20 insurers, including Zurich, over the property insurance of the WTC complex and whether terrorists' destruction of the buildings constituted one attack worth $3.5 billion or two multiple events, which would be worth some $7 billion.

But Zurich is disputing Mr. Silverstein's latest claims and has counter-sued to block his request for the company to pay for legal costs in these liability suits.

Keith Owens, a spokesperson for Zurich, said that under the liability insurance program that Silverstein Properties had on the WTC with Zurich, there is $2 million primary coverage, and then $50 million umbrella coverage on the next level.

"Individuals have sued Silverstein Properties for liabilities involving the World Trade Center, and Silverstein, in turn, is suing Zurich American Insurance in order to be reimbursed for litigation expenses because we are the primary insurer on Silverstein's liability policies," Mr. Owens said.

He explained that his company has been in the process of attempting to mediate with Silverstein Properties and that there are two primary issues regarding Zurich's liability insurance policies.

"The first issue is to define who, in fact, is covered under these policies. The second issue is to establish whether Zurich is obligated to pay for the insured's legal costs in defending itself in liability suits," he said.

Mr. Owens added that Zurich has asked the court for a declaratory judgement on who is covered and whether the company has an obligation to pay for Silverstein's legal costs.

"Our request for the judge is to compel all parties to go to mediation. We are saying, 'Judge, we would still like to have this mediated.' But if that doesn't happen, we are still asking the court to make decisions on these issues," he said.

Mr. Owens explained there is a clear disagreement between Zurich's interpretation and Mr. Silverstein's. "The questions is, are we obligated to pay Silverstein's defense costs in liability suits, which is different from paying liability claims? We don't believe Zurich is responsible for paying for those defense costs," he said.