Boeing Co’s insurers face big claims from families of the victims of the Ethiopian Airlines crash, coming less than six months after the crash of the same type of Boeing aircraft in Indonesia, insurance and aviation sources said.
An Ethiopian Airlines passenger jet bound for Nairobi crashed minutes after take-off on Sunday, killing all 157 people on board, raising questions about the safety of the Boeing 737 MAX 8, a new model that also crashed in Indonesia in October.
Willis Towers Watson was the insurance broker for Ethiopian Airlines, while Chubb was the lead insurer, a Willis spokeswoman said on Monday. A Chubb spokesman declined to comment.
Britain’s Global Aerospace was the lead insurer for Boeing and also for Lion Air, which operated the plane that crashed in October, said Global Aerospace Chief Executive Nick Brown.'
Insurers typically form a consortium to share the risks of large claims, with the lead insurer taking a larger proportion of the risk. The insured value of the plane itself was likely around $50 million (£38 million), according to industry sources.
While the initial insurance payments will be made by Ethiopian Airlines’ insurers, they may look to recoup their money from Boeing’s insurers if they can prove that the aircraft was faulty, the sources said.
Initial payments to the passengers’ families are bound by the Warsaw and Montreal conventions, but those payouts could be much higher if families pursue legal claims, particularly through U.S. courts, said Clive Garner, head of law firm Irwin Mitchell’s travel litigation group in London.
“If there were to be anything defective in terms of the plane or any of its components, then it would be possible to bring a claim against the manufacturer as well as the airline,” he added.
Marsh was Boeing’s insurance broker, two sources told Reuters. None of the sources gave financial details of the policies.
Boeing shares fell 5.6 percent on Monday.