A consortium of local underwriters and re-insurers, led by Prestige Assurance Plc, owned largely by Indian nationals, will have to pay a minimum of N2.29bn to the relatives of the ill-fated Dana Airline plane that crashed in Lagos on Sunday.
The crash claimed the lives of 146 passengers and seven crew members, as well as residents of the buildings it crashed into in Iju-Ishaga area of Lagos.
Investigation by our correspondent on Monday revealed that the minimum claims to be paid to dependants of each of the victims under the Passengers Liability policy was $100,000 (N15.7m).
The insurers may also have to pay the third party liability claims to individuals, whose properties were destroyed when the plane crashed into their buildings.
It was also gathered that the plane was insured by the owners for $4.5m by the Prestige-Assurance-led consortium.
The crash claimed the lives of 146 passengers and seven crew members, as well as residents of the buildings it crashed into in Iju-Ishaga area of Lagos.
Investigation by our correspondent on Monday revealed that the minimum claims to be paid to dependants of each of the victims under the Passengers Liability policy was $100,000 (N15.7m).
The insurers may also have to pay the third party liability claims to individuals, whose properties were destroyed when the plane crashed into their buildings.
It was also gathered that the plane was insured by the owners for $4.5m by the Prestige-Assurance-led consortium.
Our correspondent gathered that the lead insurer of the aircraft had summoned an emergency meeting involving the other companies in the consortium to ascertain their total loss and quickly respond to the huge claims that would emanate from the accident.
The Director-General, Nigerian Insurers Association, Mr. Sunday Thomas, said the effect of the Dana Airline’s crash on the industry was enormous.
He said, “The loss implication for the insurance companies is enormous. I just hope that the plane was properly insured, there were about 153 passengers and crew members in the plane.
“If you look at the compensation that will be due to the individuals, apart from the claims on the aircraft itself, and the ones that will be paid to the third party individual buildings into which the plane crashed, the loss will be high.”
Thomas said the insurance of air passengers was mandatory before any plane could fly in the country and that each passenger was entitled to a minimum cover of $100,000 (N15.7m), which is an international practice.
According to him, the third party liability is also mandatory because by law, the airline cannot destroy people’s properties and go scot-free.
When huge claims arise, insurance firms employ loss adjusters to investigate the loss and come out with the exact claims that should be paid.
The immediate past President, Institute of Loss Adjusters of Nigeria, Mr. Darlington
Mgbojikwe, said that while a local underwriter was the lead insurer of the plane, only a fraction of the risk was retained in the country.
“Not all the risk was retained locally; I think about 70 per cent of the risk should have been reinsured abroad. For this reason, it is likely that the loss adjuster for the claims payment may come from abroad,” Mgbojikwe said.
He said the people, whose properties were damaged by the crashed plane, would also be compensated to the minimum amount of insurance stipulated by the regulator.
“A comprehensive cover for the passengers and the third party is mandatory. However, in the aspect of the insurance of the aircraft, the operator may decide to have a higher cover if he has more aircraft and exposure; but if it is smaller, he may decide to have a smaller cover,” he said.
(Culled from the PUNCH)
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