Insurers could be pushed to the limit by billions of dollars in claims from Tuesday's attacks on the United States, while airlines could face potentially crippling liability costs, experts said on Thursday.

The insurance industry is trying to assess the cost of damage from the hijacked aircraft that demolished New York's World Trade Center and slammed into the Pentagon on Tuesday, possibly killing thousands of people.

But there is confusion over who will foot the bill.

Experts said the unprecedented nature of the attacks raised questions about liability -- whether the buck should stop with the airlines or airports, airport security firms or the U.S. government.

It is not clear whether United Airlines and American Airlines could be liable for the havoc caused by the collisions.

``Are the aviators responsible through their liability policies for the building damage?'' said Robert Hiscox, chairman of Lloyd's of London underwriter Hiscox Plc.

``Nothing is clear,'' he added. ``There is no legal precedent for how it's paid.''

The view is it will end up in the courts and possibly take years to untangle the complex web of insurance claims.

``Insurers spread the risk, so that everybody has a little of it, insurers reinsure, the reinsurers reinsure, it goes on and on, you can never find out where the buck stops. It rolls around the world and back again,'' said one leading industry consultant.

If the airlines are deemed liable for the damage and loss of life, the bill could be more than their aircraft and passenger liability insurance -- typically between $1.5 billion and $2.5 billion -- will pay out, according to industry experts.

``You can see the airlines' liability cover being eaten up pretty quickly with claims from the passengers' families, but to what extent can the families of people in the buildings claim against them? This is without legal precedent,'' said another insurance industry consultant.

Aviation insurers have been seeking to increase the premiums, which had proved inadequate after payouts from an attack earlier this year on Colombo airport in Sri Lanka that cost nearly $500 million.

``The losses now out of New York will only exacerbate the situation,'' said Nicholas Hughes, head of the aerospace practice at law firm Barlow Lyde & Gilbert.


But others said the liability, apart from the passengers on the aircraft, should rest with the airport authorities and the government, not the airlines.

``In the circumstances of the terrorists being in charge, I think it is unlikely that the U.S. courts would hold either United or American liable for the damage on the ground,'' said the aviation expert.

``I have a feeling that the American government is going to have to dig into its pockets for the enormous damage,'' he said.

There are also scare stories that some insurers may not have the capacity to absorb claims on this scale.

Britain's Financial Services Authority said it was monitoring the insurance fallout from the disaster.

The total cost has been estimated to be $10-15 billion or more, approaching the scale of Hurricane Andrew, which at $20 billion has been the most expensive catastrophe to date.

``The difficulty is whether or not it's going to put several companies into liquidation,'' one expert said. ``It's certainly going to weaken insurers.''

But others played down the risks of industry casualties, saying the global insurance industry had the muscle to tackle the losses.

``The losses in New York are huge, so too is the insurance market globally,'' said Hughes.

Once the size of the total bill is known, the next stage will be to decide who pays what. This could mean years of wrangling between lawyers, the insurance industry, the companies and the U.S. government.

They will need to determine what is covered and what isn't. Some of the risks will simply not be covered. There are question marks over insurance cover for terrorism in the United States.

``Some companies will be going to court to preserve their existence,'' said one of the experts.

In the bombing of the PanAm aircraft over Lockerbie in Scotland in 1988, aviation insurers footed the bill. But property damage on the ground was much less.