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

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.