Bethesda Company Wins Ruling Against Insurer
Losses Stemmed From 9/11 Attacks

By Michael S. Rosenwald
Washington Post Staff Writer
Wednesday, March 8, 2006; D04

A U.S. District Court judge in Greenbelt has ruled that HMSHost Corp., the nation's largest airport concessions operator, is entitled to recoup millions of dollars from its insurance provider for losses incurred when airports closed after the Sept. 11, 2001, terrorist attacks.

The Bethesda firm's policy with Zurich American Insurance Co. provided coverage for losses due to government action that prohibited access to airports because of damage at another location.

Shortly after the attacks, HMSHost filed a claim saying that exact scenario had occurred -- the planes hit at locations other than HMSHost's properties, and federal authorities halted air travel throughout the country.

Zurich denied the claim, arguing the airport closings were not due to damage from the attacks but from fear of more attacks. A year and a half ago, HMSHost sued Zurich in one of hundreds -- if not thousands -- of business interruption lawsuits resulting from the attacks.

In this case, "While the attacks didn't directly cause the airports to close, it was the beginning of a chain of events that had an inevitable conclusion with the closing of the airports," said Barry S. Neuman, a District lawyer who represented HMSHost along with co-counsel Kathy Bailey.

In a hearing on Monday, District Judge Roger W. Titus declined Zurich's request to throw out the case, writing that "the Zurich policy does cover the losses alleged by HMSHost to whatever extent those losses resulted from action of civil authority that prohibited the public from accessing HMS Host's premises."

Titus referred the case to a magistrate to decide how much HMSHost is owed under the policy. Bailey estimated Zurich's payment could be between $5 million and $6 million.

A Zurich spokesman declined to comment.