Mumbai: The fact that the ill-fated Malaysian flight MH17 was brought down by a missile may trigger the war exclusion clause, which will mean that aircraft insurers pay only towards compensation for victims. General Insurance Corporation (GIC) of India is part of the consortium of worldwide underwriters which have covered the airline. The underwriters may term the crash an 'act of war', sources said.
Bulk of the claim arising out of an aviation accident is not the cost of the aircraft but the compensation paid to the victims. Given that there were 295 passengers on board, the total liability claim could be in the region of $400 million or Rs 2,400 crore. GIC's share is 3-4% of the total claim. But since that the reinsurer has protection for losses over $6 million, which ensures that the maximum balance sheet impact is limited to Rs 36 crore due to the liability claim. Although the cost of a new aircraft is a little over $300 million, insures said that the hull claim for the 17-year Boeing 777 would be in the region of $100 million.
Insurance brokers say that the issue of whether the plane was downed because of an act of war could get contentious since officially none of the countries are war. There is a possibility that the airline might make a claim for terrorist attack since there is a likelihood that the missile was fired by rebels.
19/07/14 Mayur Shetty/Times of India
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Bulk of the claim arising out of an aviation accident is not the cost of the aircraft but the compensation paid to the victims. Given that there were 295 passengers on board, the total liability claim could be in the region of $400 million or Rs 2,400 crore. GIC's share is 3-4% of the total claim. But since that the reinsurer has protection for losses over $6 million, which ensures that the maximum balance sheet impact is limited to Rs 36 crore due to the liability claim. Although the cost of a new aircraft is a little over $300 million, insures said that the hull claim for the 17-year Boeing 777 would be in the region of $100 million.
Insurance brokers say that the issue of whether the plane was downed because of an act of war could get contentious since officially none of the countries are war. There is a possibility that the airline might make a claim for terrorist attack since there is a likelihood that the missile was fired by rebels.
19/07/14 Mayur Shetty/Times of India
