New York's "Ground Zero" workers reach deal on claims

A general view of the World Trade Center construction site in New York, September 8, 2009.

NEW YORK (Reuters) - Thousands of workers who suffered health problems after the September 11 attacks in 2001 have reached a settlement worth up to $657.5 million with an insurer representing the city of New York, city officials and lawyers said on Thursday.

Thousands of firefighters, police, contractors and others who worked at "Ground Zero" in the ruins of the World Trade Center sued the city and its contractors for claims of injuries associated with their rescue and clean-up work.

The settlement will be drawn from a federally financed insurance fund -- the WTC Captive Insurance Company -- created in 2004 with a $1 billion grant from the Federal Emergency Management Agency.

"The resolution of the World Trade Center litigation will allow the first responders and workers to be compensated for injuries suffered following their work at Ground Zero," New York Mayor Michael Bloomberg said in a statement.

The parties will appear before U.S. District Judge Alvin Hellerstein on Friday to request his preliminary approval of the settlement.

"This is a good settlement and we are gratified that these heroic men and women ... will finally receive just compensation for their pain and suffering, lost wages, medical and other expenses ...," said attorney Marc Bern, whose firm represents more than 9,000 of the plaintiffs.

Workers will be entitled to a payment based on the severity of his or her injuries, said Captive Insurance.

Individual recoveries will range from thousands of dollars to more than $1 million, according to a source familiar with the settlement.

The plaintiffs will have 90 days to review the deal and decide whether to participate. The agreement requires that 95 percent of the plaintiffs agree to the settlement, WTC Captive Insurance said.

"This agreement enables workers and volunteers claiming injury from the WTC site operations to obtain compensation commensurate with the nature of their injuries and the strength of their claims, while offering added protection against possible future illness," said Christine LaSala, president of Captive Insurance.

(Editing by Chris Wilson)