By buld_online 
An Air India-operated Boeing 787 Dreamliner crashed into a residential area in Ahmedabad, western India, shortly after departing for London Gatwick. The flight was carrying 242 people, including 230 passengers and 12 crew members, all of whom were involved in the incident. Emergency response teams were immediately deployed, but according to Ahmedabad police, there are no expected survivors. Authorities have also indicated possible additional fatalities at the medical college near the crash site.
In such tragic events, it’s critical to understand how aviation insurance functions. In the event of a plane crash, passengers and their financial dependents may face long-term income loss due to injury or death. It’s important for air travellers to know the compensation they may be entitled to from the airline.
“Based on the age and make of the aircraft, the hull agreed value would be approximately $75 to 80 million, which is typically covered under the Hull All Risk section of the insurance policy,” said Hitesh Girotra, Vice President – Aviation & Specialty Lines, Prudent Insurance Brokers.
“However, the operator’s liability—Air India in this case—will involve multiple dimensions. First, the nationality of the passengers on board will determine the minimum liability under the Montreal Convention. Second, since the aircraft crashed into a residential apartment, third-party property damage liability arises. Third, there could also be civilian casualties in the residential area affected by the crash,” Girotra added.
Financial impact
Narendra Bharindwal, President of IBAI, told Business Today that in cases involving large commercial aircraft like the Boeing 787, the financial impact is not shouldered by a single insurer. “The loss is spread across a global network of reinsurers, primarily in markets like London, New York, and Zurich. This is standard practice for national carriers and large fleet operators such as Air India.”
Such aircraft are insured under multi-layered programs. The hull alone is typically valued between $200–$300 million, while third-party liability, especially on international routes, can exceed $500 million.
Risk is syndicated across dozens of reinsurers, with each covering small portions (1.5% to 2%), and a lead reinsurer managing 10% to 15% and overseeing claims.
“IBAI expresses its deepest condolences to those who lost their lives in the tragic crash and extends heartfelt prayers to their families. In cases involving aircraft like the Boeing 787, insurance is extensive and globally distributed,” Bharindwal said. “Airlines arrange fleet-level programs reinsured across global markets. No single entity bears the entire burden.”
While this distributed risk model shields individual companies, it doesn’t insulate the market at large. Incidents like this contribute to market hardening—stricter underwriting, reduced flexibility, and rising premiums across the sector.
Though one-off claims may not immediately push rates up, insurers review portfolios annually. A pattern of frequent or severe losses, especially involving wide-body jets, triggers global concern. This crash, alongside others in recent months, will likely reinforce the trend of premium hikes and tighter underwriting standards.
“While immediate pricing changes are unlikely, the cumulative effect of aviation losses worldwide—including this one—will influence renewal terms in the upcoming underwriting cycle,” Bharindwal added.
“While the hull component is relatively straightforward, being governed by an agreed value policy, it is currently too early to estimate the full scope of liability, including passenger and third-party claims, arising from this tragic incident,” Girotra further added.
Thursday’s crash is the most serious wide-body aviation accident in over a decade and is expected to prompt intense scrutiny from global underwriters. Although the Boeing 787 has a strong safety record, the sudden descent post-takeoff raises concerns about possible mechanical or procedural failures.
Aviation sources indicate early loss assessments are underway, with reinsurers in London preparing for major claims. Should the crash result in a total hull loss and significant third-party liability, it may rank among the largest commercial aviation losses in years, adding pressure to an already strained global re/insurance market facing geopolitical volatility and increasing attritional claims.