A group of insurers are suing the Port Authority of New York andNew Jersey, the owner of the World Trade Center site in lowerManhattan, over the agency's new claim it is separately insured fora $2.1 billion "shortfall" in the WTC leaseholder's propertyinsurance.

The plaintiffs are a group of 10 syndicates at the Lloyd'sinsurance market as well as eight other insurers: Axa Global RisksLtd., Copenhagen Reinsurance, Great Lakes Reinsurance (UK) Ltd.;Houston Casualty, QBE International Insurance, Sirius InternationalInsurance Corp., Wurttembergische Versicherung AG and ZurichSpecialties London Ltd. The insurers' complaint was filed Thursdayat the Manhattan federal court in New York.

The Port Authority had worked with WTC leaseholder LarrySilverstein in his legal fight against insurers for more than threeyears regarding coverage under Mr. Silverstein's $3.546 billionper-occurrence property insurance for the Twin Towers.

But citing the outcome of that litigation==which resulted in Mr.Silverstein failing to double the per-occurrence coveragepayout==the Port Authority recently said there is at least a $2.1billion "shortfall" in the amount necessary to rebuild 10 millionsquare feet of commercial space at the WTC site, according to courtdocuments.

The Port Authority had insurance on other property at the WTCsite and throughout the New York area, and it has already received$950 million from its insurers for damage to WTC properties notcontrolled by Mr. Silverstein. The Port Authority is now arguingthat this insurance also separately covers its interest in thesupposed "shortfall" in the Silverstein property insurance and thatit is entitled to double the $1.5 billion limit of its insurance toa total of $3 billion.

"The Port Authority is not entitled to...double its owninsurance to make up for a shortfall in its litigation against theSilverstein insurers," said Kenneth Erickson, attorney at Ropes& Gray, which is representing the insurers that filed thelawsuit.

"Our clients collectively underwrote the largest portion of thePort Authority insurance and, when presented with this newposition, they told the Port Authority that it was wrong and nowfile this action to seek confirming judgment from the same federalcourt that heard the prior case," Mr. Erickson said.