However, James Coyle, the underwriter in charge of the WTC account at Travelers, contested that claim during cross-examination by Barry Ostrager, the lead attorney for Swiss Reinsurance.

“You never told anybody at Willis that Travelers required that any other insurer's binder be based on the Travelers form, correct?” Mr. Ostrager asked Mr. Coyle. The question quickly drew an objection from Herbert Wachtell, the lead lawyer for Mr. Silverstein, which was overruled by U.S. District Court Judge Michael Mukasey. In his response, Mr. Coyle answered: “No, sir.”

Mr. Ostrager also asked: “It didn't make any difference to Travelers what terms any other insurance binders contained, right?” Mr. Coyle replied: “Not really, no.”

Under further questioning, Mr. Coyle affirmed that Travelers never required any other excess insurer to use a Travelers form for the WTC coverage, and that prior to Sept. 11, he had no specific knowledge as to what any excess insurer had agreed to regarding its binders.

Mr. Coyle even testified that Travelers could have used Wilprop in some WTC coverage areas. “We were prepared to follow Wilprop in the excess position, potentially, with modifications,” he said, stating he had proposed during the binding period that Travelers go into the primary layer and four different excess layers.

Mr. Wachtell, however, did score a few points of his own during his examination of Mr. Coyle, when the Travelers underwriter admitted he did have a discussion with Tim Boyd a Willis assistant vice president who was the lead placing broker for the WTC insurance about Mr. Boyds intended plan to assemble a concurrent program during the binding period in 2001. In that discussion, Mr. Boyd had mentioned a plan to “circulate the Travelers form,” Mr. Coyle recounted.

“There was a discussion that Tim and I had, I recall it was in August, in Hartford, when we were in the process of negotiating change to the Travelers form,” Mr. Coyle said, “and I had asked him if his intent was to circulate this or to pass this on to the other program players words to that effect and his answer was, Well, that's the plan, that's what we're trying to do.”

However, Mr. Coyle also acknowledged that the Willis broker didn't follow up on that conversation and Mr. Coyle was never told whether any other insurers had switched to the Travelers form. “You were not negotiating on behalf of any insurer other than Travelers, were you?” Mr. Ostrager inquired afterwards. “No, sir, I was not,” Mr. Coyle said.

It has been the position of Mr. Silverstein's lawyers that Travelers had refused to use the form from Willis and had insisted its own form be used instead for all participating carriers. Testimony from Willis executives backed up that contention.

The argument over the Travelers form versus the Willis Property formalso called “Wilprop” is the central issue in this trial. Thirteen of Mr. Silverstein's WTC insurers represented in the trial contend they signed their binders on the basis of Wilprop, which would limit the WTC claim to one event worth $3.55 billion.

All agree that Willis had sent Wilprop out to insurers when attracting carriers to the program, but Mr. Silverstein says that prior to Sept. 11, the governing form was changed to the Travelers form, which doesn't define “occurrence” as Wilprop does and so leaves open the possibility that the terrorist attack using two airplanes constitutes two covered events worth some $7 billion. Final policy documents for WTC insurance weren't signed by these 13 carriers before Sept. 11, 2001.

In other testimony at the trial, Mr. Boyd of Willis recounted his actions in the immediate hours and days following the Sept. 11 event. On the day of the attack, Mr. Boyd testified, he discussed with Suzanne Douglass, managing director of property insurance at Willis, whether the WTC attack was one or two occurrences.

But even as he discussed the issue with Ms. Douglass, he said, he considered the sub-limit for the debris removal not the occurrence definition as the most pressing coverage question. It was only a few days later that he realized the one-or-two-occurrences issue was the most pertinent coverage matter, he said.

Mr. Boyd also testified that in late September of 2001 he tried to get Allianz Group which had already issued a policy based on Wilprop before 9/11to switch to the Travelers form because of his understanding “that Allianz often issued a placeholder policy until such time as the program form became finalized.”

Additionally, Mr. Boyd had unsuccessfully tried on Sept. 24 to get XL Capital Ltd. and ACE Ltd. in Bermuda both of which had signed binders with explicit references to Wilprop prior to Sept. 11to switch to the Travelers form, he recounted. (Both XL and ACE have already settled with Mr. Silverstein for some $365 million on the basis of the one-occurrence policy with Wilprop.)

The court this week will be in session just on Wednesday and Thursday due to a holiday schedule. The defense is expected to wrap up its case as early as next week, allowing the jury to begin its deliberation.

Reproduced from National Underwriter Edition, April 2, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.