Air India crash triggers historic aviation insurance claims

On June 12, 2025, a Boeing 787-8 Dreamliner operated by Air India tragically crashed into a hostel complex near Ahmedabad, India, just 33 seconds after taking off for London Gatwick. Of the 242 people onboard, 241 were confirmed dead, making it one of the deadliest aviation disasters in over a decade. The crash also resulted in fatalities on the ground, primarily among students residing in the hostel. Only one passenger, British-Indian Vishwash Kumar Ramesh, survived this incident. Investigations into the crash are ongoing, with teams from Indian authorities, along with experts from the United States and the United Kingdom, examining the incident's causes and contributing factors. The financial implications of the crash are significant; estimates suggest that the total liability could range from $211 million to $280 million (approximately £166 million to £220 million). This figure incorporates the full hull value of the aircraft, compensation for victims' families under international aviation laws, and third-party damages from those who suffered losses due to the crash. India, as a signatory to the Montreal Convention, mandates certain compensation frameworks that could see families receiving substantial amounts following such incidents. In light of the devastation, Air India has announced interim compensation measures, offering 1 crore rupees (approximately £85,000) to the victims' families, along with further interim payments to those affected. As the airline now owned by the Tata Group has not publicly detailed its insurance coverage, global reinsurers are expected to absorb a considerable portion of the financial impact due to the substantial number of international passengers aboard flight AI171. The Life Insurance Corporation of India (LIC) is also facilitating a smoother claim process for victims' families by waiving certain documentation requirements, allowing compensation claims to be filed with official government records rather than necessitating death certificates. The full cost and implications of the crash, accounting for lives lost, property damage, and future safety regulations, remain under investigation, with officials and engineers conducting thorough examinations. Following the crash, India's Directorate General of Civil Aviation has ordered additional checks on all Boeing 787 aircraft operating in the country, highlighting the gravity of the situation and the urgent need to ensure passenger safety in future flights.