(Bloomberg) ? Aon Corp., the world?s second-biggest insurance broker, has been hired to find coverage for developer Larry Silverstein?s construction of a new skyscraper on the site of New York?s World Trade Center.

Aon will arrange construction, liability and workers compensation insurance for the 1,776-foot Freedom Tower, the company and Silverstein said in a statement yesterday.

Silverstein, who fought a three-year legal battle with 24 insurers who covered the twin towers that were destroyed in the September 11 terrorist attack, is returning to the insurance market to cover the first of five high-rises he plans for Ground Zero.

Finding new insurers is ?probably the biggest challenge an insurance broker has had so far in the 21st century,? said Robert Hartwig, chief economist of the New York-based Insurance Information Institute. ?The site has already twice been targeted by terrorists, and who?s to say it wouldn?t be targeted again??

Failure to fully insure the project could jeopardise its financing, Hartwig said, since lenders aren?t likely to participate unless their risks are covered.

Silverstein?s legal battles with his previous insurers brought mixed results. One jury rejected his claim for double recovery. Barring reversals on appeal, he is expected to recover a total of $4.7 billion. ?We are delighted to be working with the Silverstein team on a project that is so important to the people of New York and the lower Manhattan business community,? Aon chairman and chief executive officer Patrick Ryan said in the statement. Silverstein and Aon don?t yet know how much insurance will be necessary to cover the project in the construction phase, said Dara McQuillan, Silverstein?s spokesman, in an e-mailed response to questions. Silverstein is ?highly confident that we will procure the insurance we need? regardless of the battles he?s had with insurers, and concerns about the tower?s potential as a terror target, McQuillan said.

Gary Sullivan, Aon?s director of public relations, declined comment.

Silverstein Properties Inc. broke ground on the Freedom Tower in July. The building will be 1,776 feet high, taller than the World Trade Center. Willis Group Holdings Ltd. was Silverstein?s insurance broker for the original towers.

Shares of Aon rose 20 cents to $22.79 at 4:15 p.m. in New York Stock Exchange composite trading. They have fallen 7.2 percent in the past year.

Twenty-four companies, led by Swiss Reinsurance Co. and Lloyds of London, insured Silverstein?s 99-year lease of the trade centre from the Port Authority of New York and New Jersey, its builder and owner, just six weeks before its destruction. The pool of insurers who cover the Freedom Tower is likely to be larger than the previous one, Hartwig said, since carriers are likely to want to buy smaller shares of the risk.

Further complicating Aon?s task, Hartwig said, is the possible on December 31 expiration of the Terrorist Risk Insurance Act, under which the US government covers some excess losses in the event of a terrorist attack. Last week, US Treasury Secretary John Snow said his department is ?predisposed? to have private markets insure for terrorist attacks, a signal that the department may not recommend extending the act, which was created after the September 2001 attacks.

Aon will have to account for the act?s potential expiration in its negotiations with insurers, Hartwig said. Some may choose to insure all risks except terrorism.

Silverstein has said the Freedom Tower will be designed to better withstand fire and other catastrophic shocks. That may partially offset some potential costs, Hartwig said.

Silverstein has rights to build a total of five towers at Ground Zero, which he has said he would finance by borrowing against the Freedom Tower.

Silverstein is also building a 52-story skyscraper, 7 World Trade Center, across the street from the Freedom Tower site. That building is about a year from completion. He has yet to sign any tenants for either tower.