Nepal Plane Crash Insurance: Each victim may get Tk 1.6cr max
12:00 AM, March 27, 2018 / LAST MODIFIED: 12:57 PM, March 27, 2018

Nepal Plane Crash Insurance: Each victim may get up to Tk 1.6cr

Families of the victims of US-Bangla plane crash are each entitled to get up to Tk 1.6 crore in compensation from the airlines and its insurers under international aviation laws.

The airlines and its local and foreign insurers have already begun a survey to determine the damage and set the compensation amount, US-Bangla and insurance company officials said.

“The victims are likely to get the compensation within a month,” Shafique Shamim, managing director of Sena Kalyan Insurance Company, one of the insurers, said last week.

The 76-seater Bombardier had 71 people, including four crew members, on board when it crashed in a football pitch near Kathmandu's Tribhuvan International Airport on March 12.

Fifty people were killed and the rest were injured. Of those killed, 27 are Bangladeshis (including all four crew members), 22 Nepalese and one is a Chinese citizen.

In case of such accidents, international carriers go by two conventions -- Warsaw Convention and Montreal Convention.

Both Bangladesh and Nepal are signatories of the Warsaw Convention only.

In 1955, the Warsaw Convention was amended to limit airlines' liability and the compensation for each passenger was set at $46,955 (2.5 lakh francs) or about Tk 38 lakh. 

However, the US-Bangla took insurance coverage of highest $2 lakh or about Tk 1.6 crore for each passenger and $50,000 for each crew member.

Families of those who died are likely to get the maximum amount, said Shibli Rubayat Ul Islam, chairman of Sadharan Bima Corporation, another insurer of US-Bangla.

Under no circumstances, the US-Bangla can pay less than $46,955 (about Tk 38 lakh) to the families of victims.   

The compensation for those injured will be determined during the damage assessment and the maximum limit for them is Tk 38 lakh, officials said.

Had Bangladesh ratified the Montreal Convention, victims could have claimed up to $1.5 lakh from airlines in addition to the sum insured against them by the company.

In 1999, this convention was modified to protect passengers' right, setting the minimum compensation limit at $75,000 even if an accident occurred as a result of “willful neglect” of the carrier.

The sum is about $28,000 more than the maximum limit under Warsaw Convention. 

Under the Warsaw Convention, the air carrier is not liable for passengers' damage if it can prove that it took all necessary measures to avoid the accident.

Bangladesh signed the Montreal Convention in May 1999 but did not ratify it.

The Daily Star spoke to four top officials of the relevant authorities to know why, but they all were in the dark.

The officials include Abul Hasnat Md Ziaul Haque, additional secretary of the ministry of civil aviation and tourism; Rajin Ahmed, head of the legal cell of the civil aviation authority; and Imran Asif, chief executive of the US-Bangla Airlines.

However, Rajin said the ratification process was nearly complete and that they would soon send the file for the cabinet's approval.

Among the South Asian countries, India, Pakistan, and the Maldives are signatories to the Montreal Convention.

US-Bangla took insurance coverage of $107 million through two local insurance companies -- Sena Kalyan Insurance Company and Sadharan Bima Corporation.

Of the total amount, $7 million coverage is for aircraft and $100 million for passengers' liabilities.

Of the liability portion, about 1 percent is shared between Sena Kalyan and Sadharan Bima while the rest are reinsured with foreign insurance companies.

The foreign insurers include Halifax, a subsidiary of global insurance giant Lloyds, and General Insurance Corporation of India, said Shafique Shamim, managing director of Sena Kalyan insurance.

Meanwhile, Sadharan Bima already received an assessment report on the destroyed aircraft from the surveyor.

The report recommended paying US-Bangla the full coverage of $ 7 million, said Shibli, the Sadharan Bima chairman.

“We will hand over the compensation for the aircraft to the company soon,” he added.

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