I fnd the insurance companies disqusting for this. They didn't hesitate to increase insurance premiums for any situation they thought could be effected by terrorism, but not to cover those who are cleaning up the wtc and finding the bocies for their loved ones to bury.... Guess insurance is only for situation they don't think they will have to pay out on.

January 18, 2002

Contractors at Ground Zero Denied Insurance for Cleanup

By STEVEN GREENHOUSE

y everyone's account, the contracting companies excavating the tons of broken steel and smoking debris at ground zero have worked with energy and devotion. But there is one thing they have worked without — insurance.

In one of the quiet subplots of the cleanup, the giant contractors that run the cranes and trucks and work crews at the World Trade Center site have been denied the basic liability coverage against injury and property damage that builders typically carry on every project, even on a single- family house.

Insurance companies, it turns out, have simply declined to provide the extensive coverage needed, believing that the cleanup project is too big and the risk too hard to measure. The companies, while providing one tiny policy, have also denied the city the broad insurance it sought to protect itself against potential lawsuits from people who believe they were sickened or injured by the mess at ground zero in Lower Manhattan.

And so for four months, a work site that has been called the most dangerous in the nation has been worked, quite incongruously, with virtually no insurance protection and thus some anxiously crossed fingers.

Even efforts by Aon Corporation and Marsh & McLennan, the two large insurance brokers whose offices were devastated by the attack, have failed to find insurance companies willing to provide coverage to the contractors and the city.

Now, the building contractors, after more than 120 days of round-the-clock work without a fatality, have turned to Congress to provide them with the coverage that the insurance industry has balked at. The contractors, who say that they will be making only meager profits, are worried that they will be pushed into bankruptcy by a wave of lawsuits expected over the asbestos, mercury and other toxic agents released into the air by the Sept. 11 terrorist attack and the subsequent excavation and cleanup.

"It's crazy: you're doing heroic work and in the end you might be putting yourself out of business," said John Cavanagh, vice chairman of AMEC Construction Management Services, one of the four main contractors at the site. "We're concerned that for any future emergency, when someone tries to be the good Samaritan and then realizes that I'm going to put myself out of business, you're going to have a hard time finding people to step in and help."

Two major insurance companies that were approached by the city and the contractors — Liberty Mutual and American International Group — would not comment about the inability to find coverage. Generally, builders need a new insurance policy for every sizable job. But officials with the city and the contractors said various insurers told them that the risks appeared too great and too hard to measure. Several insurers also said they were hobbled by the billions of dollars they are already paying out in compensation for the destruction of the trade center.

"I can't blame business for acting in a businesslike way," said Lawrence Martin, special insurance counsel for the New York City Law Department. "I can't force them to step up. But the city and the contractors need someone to step up."

The four main contractors at ground zero — Bovis, Tully, Turner and AMEC — each expect to earn a few million dollars in profit for their labor. But those contractors and the city fear that plaintiffs looking for defendants with deep pockets will look to them because Congress has already passed legislation limiting Sept. 11-related liability for New York State, the airlines, the Port Authority of New York and New Jersey, and Larry Silverstein, the new leaseholder for the trade center.

"This could be economically devastating to companies whose response to this terrorist attack has been heroic," said Kenneth Holden, New York City's commissioner of design and construction and the official in charge of the cleanup.

Executives with the contractors said they normally would never undertake a project, especially a $1 billion job like the World Trade Center cleanup, without basic liability coverage. They fear that lawsuits from nearby companies will claim that the cleanup damaged their buildings — perhaps by eroding a building foundation. They also fear that city residents may sue, claiming that the cleanup, the cranes and the trucks stirred asbestos and other debris that polluted the air and caused health problems. While workers at the site have workers' compensation and health insurance to cover injuries, they still could sue companies other than their employers over issues like asbestos poisoning.

The contractors said they plunged into the rescue and recovery efforts just hours after the terrorist attack, even though they did not have insurance coverage. At the time, the city told them it was confident it would eventually obtain an umbrella insurance policy covering all of them.

"There's really just one reason why these contractors are down there — patriotically it's the right thing to do," said Steven Charney, general counsel for the Building Trades Employers Association of New York.

At the moment, the city and the contractors, together, have about $75 million in general liability coverage, which they say may cover basic accidents, but not a flood of lawsuits over asbestos pollution. And that $75 million is less than a fifth of what builders have for a typical, far smaller building project in Manhattan. They say that a project on the order of the ground zero cleanup should have at least $2 billion in insurance.

The city has asked Aon, Marsh & McLennan and another broker, Willis, to scour the world for insurers for coverage. A few insurers proposed a policy that would last two or three years, but the contractors and city called that woefully inadequate, saying they feared that people would sue for asbestos poisoning and other problems 10 and 20 years from now.

Executives from the four main contractors and from the 200 subcontractors at ground zero say they fear that the potential liability could prevent them from moving ahead on other building projects across they nation. They say the huge financial risks they have assumed in the cleanup will make it hard for them to get bonded for other construction projects because real estate developers might view their balance sheets as too risky.

Representative John E. Sweeney, a Republican from upstate New York, said the New York delegation was pressing Congress to indemnify the city and the contractors for any lawsuits stemming from the cleanup.

"Contractors throughout the state and city have really answered the call, donating equipment, personnel and expertise," he said. "Unless we fashion a way to provide liability protection to these contractors, we're committing a wrong."

Copyright 2002 The New York Times Company

-- Cherri (jessam5@home.com), January 18, 2002

There are valid workers who cannot get insurance. What is supposed to happen, it just sit there until the bodies have rotted and the rats take over? The reason it is taking so long is they are trying to preserve whatever bodies they find as intact as possible. But those insurance companies who don't hessitate to take over payment of premiums when there is little or no chance of paying out, are a blaring example of corperate corruption. They ran crying to the government about paying off the claims costing them too much, before the bodies were even cold. Well where in hell has the money they have taken in for decades gone? Don't they have the resoerces to cover every one they have insured? Why not.

One again it is the little guy working to clean up the debries of the WTC, without insurance as they dig through toxic waste and dead and decomposing human bodies.

Odd how I seem to see so many commercials by insurance companies these days, with messages of caring fr their clients. I feel like calling them and telling them I wouldn't buy their insurance if they won't insure the workers at the WTC.

-- Cherri (jessam5@home.com), January 20, 2002.

Cherri,

A lot of what you say is true and I agree in principle. The original concept behind insurance -- a group of people pooling their resources to help a few -- was ruined many years ago when the money managers took over the businesses. I left the insurance business because I was miserable selling the stuff, and miserable trying to get people the money they were due for claims. So, I'm not a cheerleader for the industry by any means.

I recently had a chance to talk with a Chubb underwriter who was reviewing our own businesses. He said that Chubb had already decided to pay out their losses for the WTC, even though there is a clause in most policies that specifically excludes "acts of war." (Most people aren't aware of this, by the way -- or other, more common exclusions for earthquake or flooding). But just for the record, the insurance companies haven't been making zillions of dollars; that's a common misconception. (The reason I know this is because they kept cutting my commissions, citing that as the reason![g]) Take a look at this graphic: The fact is, the insurance companies have been losing money on their *core* business (premiums vs. money paid out) for many, many years. The ONLY thing that has even kept them afloat has been the good economy; they were able to invest premium dollars and get a high return. (Basically, without getting too technical, they could take your premium money, invest it, and get 10-20% return in between the time you paid it and the time they had to pay a loss.[g]) With the collapse of the stock market, the bubble burst for them, too. Here's the real problem: see what Littman said above. Whether you realize it or not, when your house burns or your car is wrecked, the insurance company that paid YOU will painstakingly pore over every person who ever touched that house or car; if they think they can file a claim against your electrician or mechanic, they will. That way, they can recover some of their money. Then the liability carrier who covered the electrician or mechanic goes after the manufacturer of the parts; THEIR liability insurance has to pay. And on, and on it goes ... several layers deep in the case of a big loss. The companies *HATE* liability insurance, and in fact, the government may end up underwriting all of it eventually. Their premiums are capped by law in many states, but even a simple auto policy can result in a HUGE payout if you get a sympathetic jury. Paying $100,000 out on a policy for which the insured paid a premium of $200 isn't a good business model. At any rate; the problem in this case is the liability thing. I don't defend it (insurance companies *ARE* run by Nerwins with thick glasses and calcultors for souls). But if you want to address the real problem behind this, support tort reform. In other words, if you can guarantee them that there's some way to even *PREDICT* their possible losses, they'll be glad to write the insurance. The problem is, in the past 20 years, the caps have come off, lawyers have found ways to even get around policy limits (forcing companies to pay more than THEY were paid for!), and worse. In sum: I hate it as bad as you, but I'm not surprised. Nor is it entirely the insurance companies' fault.

-- Stephen M. Poole (smpoole7@bellsouth.net), January 21, 2002.