Insurers face tens of millions in claims after Boeing plane crashes

Insurers face tens of millions in claims after Boeing plane crashes | Insurance Business

Insurers face tens of millions in claims after Boeing plane crashes

The insurers of Boeing are looking down the barrel of big claims from families of victims in the recent Ethiopian Airlines crash, which comes just months after a similar crash that involved a Boeing aircraft in Indonesia, reported Reuters. Industry sources say that the insured value of the plane alone was around US$50 million, but that’s not the only source of future claims.

The passenger jet headed for Nairobi crashed minutes after taking off on March 10, killing the 157 people that were on board. Though the initial insurance payments will be made by the insurers of Ethiopian Airlines, they might try to recoup their money from Boeing’s insurers if they can show that the aircraft was faulty, said aviation and insurance sources cited by Reuters.

If the families pursue legal claims, especially in the US court system, those payouts could be much higher, said Clive Garner, head of law firm Irwin Mitchell’s travel litigation group in London.

“If there were to be anything defective in terms of the plane or any of its components, then it would be possible to bring a claim against the manufacturer as well as the airline,” he explained.

Eight US citizens were killed in the Ethiopian Airlines crash, which increases the chances that litigation on behalf of all victims’ families could be heard by a US court, said Justin Green, a New York-based aviation lawyer who has represented families in cases against Boeing.

Moreover, legal compensation payments for crash victims could run around US$2 million to US$3 million per person in the US. Calculations by Reuters based on the Montreal convention estimate that initial compensation costs for all 157 passengers who died on the flight could be around US$25 million.

The Montreal convention offers a maximum of 113,100 special drawing rights, worth $1.39 right now, for the death or injury of each passenger involved, but not all countries are part of the convention.

Willis Towers Watson was the insurance broker for Ethiopian Airlines, and Chubb was the lead insurer, according to reports.