Plane crash: Air India Express Boeing 737 aircraft was insured for $50 mn

While the asset insurance policy secures an airline from loss to its aircraft, engine or spares, the liability cover protects it from third party claims.
The Air India Express Boeing 737 which met with an accident at Kozhikode on Friday night was insured for $50 million.

Globally, airlines buy insurance policies to cover asset damage, customer liability and third party claims.

Air India's fleet is insured for around $10 billion and the airline has a liability cover of $750 million. The policy is underwritten by four public sector insurance companies. This covers all 170 planes of Air India, Air India Express and Alliance Air. The policy was renewed in April with an annual premium of around $ 30 million, sources said.

While the asset insurance policy secures an airline from loss to its aircraft, engine or spares, the liability cover protects it from third party claims.

"It is a total hull loss," an aviation industry source said referring to the thirteen year old aircraft which broke into two parts after landing in heavy rain at Kozhikode. 

While the Air India Express is expected to get full insured amount for the hull loss, it would have to pay compensation to kin of deceased and injured passengers as per applicable laws. The compensation would be paid from its liability cover.

In a statement, Air India Express said it is adequately insured and will pay compensation in accordance with applicable law at the appropriate juncture.

Air India Express has established passenger information center and a toll free number had been made available for family or friends of those who may have been on board flights IX-1344. 

The emergency response team Members and Go teams of Air India with Air India Express team have already been sent to the accident scene, and all will render necessary help to assist the emergency services and local authorities to the passengers, it said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel