Congressional Research Service ˜ The Library of Congress
CRS Report for Congress
Received through the CRS Web
Order Code RS21158
Updated June 14, 2002
September 11 Insurance Litigation
Christopher Alan Jennings
American Law Division
Insurance litigation arising out of the events of September 11 is already underway.
Disputes involve claims for losses ranging from several thousand dollars to the billions.
While some claims are involved in litigation, many are being resolved through
alternative forms of dispute resolution. How much litigation will arise from September
11 remains unclear. At least two lawsuits deal with business interruption claims.
Another cluster of suits involves the World Trade Center itself; the legal issues
underpinning these cases will settle whether insurance companies owe $3.54 or $7.08
billion in coverage. This report summarizes these cases and will be updated.
While Congress responds to the wide spread exclusion of terrorism risks from
insurance coverage through “The Terrorism Protection Act,” H.R. 3210, placed on the
Senate Legislative Calender on December 3, 2001, and “The Terrorism Risk Insurance
Act,” S. 2600, laid before the Senate by unanimous consent on June 13, 2002, the courts
are responding to disputed insurance claims arising out the events of September 11.
Business Interruption. Business interruption insurance covers loss of income
resulting from the suspension of business operations. While property insurance pays for
damage to property, it does not pay for consequential damages stemming from that loss.
For example, if a candy store burns down the week of Valentines Day, its property
insurance will cover damage to inventory, equipment, display cases, and other insured
items, but it will not cover the loss of business income suffered as a result of ceasing
operations during a time when candy is in high demand. However, business interruption
insurance could potentially cover those losses. While the purpose and function of