Swiss Re's court battle to stem its losses from the destruction of the World Trade Centre will have implications worth billions of dollars for other insurers, experts say.
The company faces the largest direct exposure from the destruction of the buildings and wants to stop the owners making two claims on its policies.
It asked a US court to decide whether, for insurance purposes, the 11 Septem-ber attacks count as one event or more, given four aircraft were hijacked, with two of the resulting crashes causing the destruction of the twin towers.
The company estimates its losses at $1.25bn (£879m), but the figure could double if the court rules that two insured events occurred.
At stake is not just the company's 22% stake of the property damage, which it said is worth about $3.5bn (£2.4bn), but billions of dollars in losses being covered by other insurers.
Larry Silverstein, lead investor in the tower's owner, Silverstein Properties and Westfield Properties, claims there were two separate insured events, potentially opening the way for two separate insurance claims worth a total of $7bn (£4.8bn).
Leading law firm Hammond Suddards Edge, together with US experts, is launching an advice service for insurers on both sides of the Atlantic to help clarify the legal issues. Its commercial insurance partner Steve Reynolds said one event took place, but its implications for insurance purposes could depend on individual policy wordings.
He said: "While Silverstein has been reported as arguing that two occurrences have arisen in New York and Swiss Re maintain it is all one event, there is no reason in UK or New York [federal] law that prevents both sides being right - an event can occur more than once.
"In this case, we think there is one orchestrated terrorist attack and therefore one cause and one event."
He said Silverstein's argument could be damaged if it transpired the towers were under-insured.
"Finding that two occurrences apply still may not assist if there is significant or deliberate under-insurance. You can't buy half the cover necessary and hope you can claim twice."
Swiss Re began its action in a US federal court last week, seeking a "declaratory judgment" on how many insured events took place, but it could be some time before a ruling is made.
A decision that more than one event took place could even reduce losses for some insurers. If an insurer lost $50m (£34.4m) on each tower, totalling $100m (£68.8m), but its reinsurance protected it only against a single loss of more than $50m (£34.4m), it would not be able to claim from its reinsurer.
Reynolds said: "Insurers are quoting their loss positions net of reinsurance recoveries. What is not clear is how the number of losses affects those net positions."
