FAQ: Financial Liabilities Involved in Plane Crash, Emergency Landings

WHAT does airline insurance typically cover? Airline insurance usually includes three key components: Physical damage to the aircraft; Passenger Legal Liability—covers injury or death of passengers; and Third-Party Liability—covers injury, death, or property damage caused to people on the ground.

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While Indian insurers have some exposure, the majority of liability is covered by international reinsurers.

How do flight crashes or emergency landings affect aviation insurance premiums and risk assessments? Such incidents can significantly impact premiums. For instance, in a total loss scenario, the estimated claim may be around $130 million—$80 million for the aircraft and $50 million for liabilities. Underwriters may enforce stricter parameters when issuing future policies, especially regarding aircraft condition.