It sends the case back to the courtroom of U.S. District Court Judge Jed Rakoff in Manhattan, who had issued a summary judgment capping ABM's ability to recover under a policy sublimit for contingent time element at $10 million.

The opinion will allow ABM to argue that it has business income coverage for losses that equal or exceed the maximum $127 million policy limit, according to ABM attorney Richard P. Lewis of the Anderson Kill & Olick firm in New York.

A spokesperson at Zurich's Schaumburg Ill. headquarters said the firm is reviewing the decision and had no comment concerning whether it would appeal the ruling.

ABM, according to its law firm, provided various services to the Trade Center leaseholder and tenants of the WTC, in the common and tenanted areas,

At issue was whether ABM's loss of income from destruction of the Trade Center was covered as a business interruption loss from property "used" or "controlled" by ABM, or as a Contingent Time Element (Contingent Business Interruption) loss from property "not operated" by ABM but rather by ABM's customers.

Judge Rakoff concluded that that ABM neither "used" nor "controlled" the common or tenanted areas, and therefore did not have business income coverage for loss of profits from their destruction.

As to the parts of the Twin Towers that the judge found ABM did control, namely its offices, warehouse space, janitorial closets and freight elevators, the District Court held that ABM's loss of income was not caused by the destruction of that property, but by the destruction of ABM's customers in the buildings and the Trade Center itself.

The judge concluded that ABM was entitled only to contingent business income coverage, which had a sublimit of $10 million in the insurance policy sold by Zurich.

In its opinion, the 2nd Circuit found ABM had business income coverage for its loss from destruction of the tenanted space and the common areas because "the existence and configuration of the common areas and tenants' premises were vital to the execution of ABM's business purpose."

The appeals court said further that the premises "were the means by which ABM derived its income and were as essential to that function as ABM's cleaning tools."

It added that policyholders such as ABM can make a business income claim for loss of profits caused by damage to property in which they have an insurable interest.

The exact amount of the ABM damages was reserved for further determination in District Court.

Also reversed by the ruling was Judge Rakoff's finding that ABM was not entitled to claim any of the additional costs it incurred to its operations in the wake of the destruction of the WTC.

The appeals court found ABM is entitled to such extra expenses coverage regardless of where it incurred those expenses and must simply demonstrate that they resulted from the destruction of the WTC.

John Ellison who represented ABM with Mr. Lewis called the ruling "a huge victory for service-oriented businesses nationwide, since it affirms that companies can have an insurable interest in properties they do not own or lease but upon which they may nonetheless rely for business income."

Meanwhile, in another Trade Center business interruption case, U.S. District Court Judge Shira Scheindlin ruled last week that Hold Brothers, a firm that had an office at the Trade Center can go ahead with its suit seeking in excess of $1 million from Hartford Casualty Insurance for consequential damages that arose when the insurance company allegedly failed to fulfill its obligations under the policy.

Finley Harckham, the Hold Brothers attorney said his client alleges it lost additional monies when Hartford failed to promptly pay a business interruption claim.