The recent crash of an Air India Boeing 787 Dreamliner near the Meghani area of Ahmedabad is expected to result in global insurance claims of up to $150 million (₹1,000–1,200 crore), according to aviation insurance experts. While the bulk of the payout will be handled by overseas reinsurers, Indian insurers will also face limited exposure.
The aircraft, en route to London with 242 passengers and crew onboard, reportedly suffered a catastrophic failure before crashing into a residential locality. The incident has raised not only aviation safety concerns but also questions about liability and insurance.
According to Sourav Biswas, Business Head – Aviation Insurance at Alliance Insurance Brokers, “The insured value of the Boeing 787 Dreamliner is around $75–85 million. In case of total loss, the full hull insurance value becomes payable.” Hull insurance covers the physical damage or complete destruction of the aircraft.
In India, Tata AIG General Insurance leads the aviation policy for Air India, with support from co-insurers like GIC Re, New India Assurance, United India Insurance, and Oriental Insurance. However, Indian insurers are expected to bear only about 10% of the hull loss, with most of the risk reinsured by UK-based global reinsurers.
The more complicated aspect lies in the liabilities towards passengers and third parties. The Montreal Convention of 1999, which India ratified in 2009, governs compensation to passengers in international air travel. Compensation is calculated using Special Drawing Rights (SDRs). As of October 2024, the cap stood at 128,821 SDRs, or roughly ₹1.4 crore per passenger. Interim relief may be provided, but the final payouts could take years.
Of the 242 people onboard, 169 were Indian nationals, 53 were from the UK, and others were from Canada and Portugal. If courts determine liability, the operator could face significant third-party claims, especially as the aircraft crashed into a populated area, potentially causing damage to property and civilian lives.
This incident draws parallels with the 2020 Air India Express crash in Kozhikode, where insurers and reinsurers paid around ₹660 crore in claims. This time, experts estimate the figure may rise considerably, dealing a major blow to the global aviation insurance sector.
