Landmark Event: Conclusion of 9/11 Litigation
For some it seems like ages ago, and for others it seems like yesterday. Regardless, we all remember where we were on the morning of September 11, 2001. Following that monumental day in American history, so many things changed for so many people. Many of those changes had significant ripple effects in the business world as well, not the least of which was the insurance industry. It’s incredible to think that the litigation stemming from that day only wrapped up recently, some 16+ years later. However, a big reason for that was because many of the events surrounding that day were unprecedented.
Insurance-wise, there was debate about whether or not it should be considered one occurrence or multiple occurrences (one for each plane), the determination of which would mean a difference of billions of insurance dollars. Additionally, acts of terrorism weren’t even considered in most insurance policies at the time. Couple that with all the wrongful death, personal injury, property damage, and business interruption claims, and you can see why demands were in excess of $30 billion. Fast-forward 16 years. Every single wrongful death suit was resolved and settled without trial, which is mind-blowing considering the number of lives involved.
All third-party liability claims were settled or dismissed without a trial as well. The fact that all matters were settled, resolved, or dismissed without trial suggests that the time it took must’ve been a result of the sheer volume of claims rather than the process of settling them. You’re probably wondering how much of the $30 billion was actually paid out. I preface the next sentence by stating that it’s not as simple as giving the demand number and the settlement number — there’s far too much detail in between.
However, the total indemnity payments by the aviation insurance market for all third-party liability claims arising from the 9/11 attacks were less than $2 billion. Keep in mind that there were several non-aviation-related insurers involved as well.