NEW YORK JURY TRIAL OPENS ON INSURANCE CLAIMS FOR TWIN TOWERS.

Jury selection started Feb. 4 for the first phase of the trial in U.S. District Court in Manhattan over how much insurers will have to pay New York developer Larry Silverstein for damage incurred to the Twin Towers of the World Trade Centers during the Sept. 11, 2001, terrorist attacks.

Silverstein has claimed he is entitled to collect $6.6 billion from insurers on grounds there were two attacks, one on each tower, not just the $3.5 billion his policy limits him to for each "occurrence."

The first phase of the three-part trial focuses on what the insurance policy language was at the time of the attacks, the second phase on whether the attacks were one or two occurrences, and the third phase on the value of the actual loss.

Silverstein Properties hired Willis Group Holdings, a New York-based insurance brokerage firm, to buy its property insurance prior to its July 24, 2001, closing on the $3.2 billion WTC lease.

The brokerage obtained preliminary approval from 23 insurers to provide $3.5 billion in coverage per occurrence, which was defined by the brokerage form as damages attributable to a "series of similar causes."

On July 9, 2001, however, Travelers Property Casualty rejected the brokerage form and agreed to provide coverage based on its own form, which did not contain a definition of occurrence.

On July 12, 2001, the brokerage's primary broker, Timothy Boyd, wrote, to the other members of the brokerage: "Unless advised otherwise, I intend to bind as follows: Use Travelers and accept its form."

Silverstein argues the other insurers were aware the brokerage had switched to the Travelers form. Swiss Reinsurance Co. and other insurers argue the Travelers form only applied to Travelers and they had based their coverage on the brokerage form which defined "occurrence."

The insurers hope to persuade the jurors that notes scribbled by Silverstein's top insurance employee, Robert Strachan, show he knew what form was used, understood the definition of "occurrence" and knew WTC was underinsured.

The insurers have evidence showing Strachan faxed a form twice to a government agency on which he had written, "FYI, the 'occurrence' definition," pointing to language limiting the coverage to $3.5 billion per occurrence.

They also have notes showing on Sept. 12 after the attacks Strachan wrote during a conference call, "Underinsured WTC."

Silverstein's attorney, Herbert Wachtell, has argued the notes are irrelevant because the insurers had already agreed to provide coverage.