Crash of Flight 5191

Comair says it has plenty of insurance

Comair has plenty of insurance to cover any legal liabilities related to the plane crash that killed 49 in Lexington on Aug. 27, the company said yesterday.

The Erlanger-based airline won’t say how much coverage it has, but it doesn’t dispute speculation from industry observers that its coverage is much more than the federally mandated minimum.

“We are confident that we have adequate insurance coverage,” said Comair spokeswoman Kate Marx. “We carry this insurance so we can focus our efforts on caring for the families and assisting the ongoing investigation” of the crash that killed all but one person aboard.

The minimum amount of coverage is based on the size of the aircraft. It’s about $240,000 per passenger for the 50-seat CRJ-100 that crashed in Lexington.

Industry observers say airlines such as Comair and its owner, Delta Air Lines, almost always have much more coverage than required.

“Delta (including Comair) probably carries a billion dollars worth of liability (insurance),” said Darrell Hyde, executive vice president and aviation insurance specialist for CS&A Aviation Insurance in Atlanta.

The federal minimum is “nowhere near what most responsible airlines would carry,” Hyde said.

The 2006 certificate of insurance filed by Delta and Comair with the Federal Aviation Administration lists Marsh USA Inc. in New York as the companies’ broker and four insurers or groups of insurers that provide its liability coverage.

The certificate, signed Dec. 12 by Marsh Vice President Robert Watkins, says only that Delta and Comair meet the minimum requirements.

Watkins did not return a phone call seeking comment.

“We’re just not commenting,” said Bob Grieves, spokesman for ACE American Insurance Co. ACE is part of the U.S. Aircraft Insurance Group, the lead underwriter.

Hyde, a former president of the Aviation Insurance Association, said airlines must carry “very broad” policies that cover every conceivable threat.

The hunt for such a policy begins with choosing a broker, such as Marsh, to act as “their representative -- like if you buy a house, you go get a Realtor,” said Hyde, who has no connection with Delta or Comair.

The broker puts together a proposal for coverage and gets a lead underwriter, such as U.S. Aircraft Insurance Group, to take possibly 15 percent of the amount of coverage sought by the airline.

At that point, Marsh would typically get a London broker and a European underwriter to lead the way in recruiting European insurers to take part of the policy.

“A lot of them have offices in London, so you can go up and down the streets in the insurance area in London and get almost all of it placed,” Hyde said.

The cost of liability coverage is relatively cheap, say $200,000 to $400,000 a year per aircraft, because losses are low and airline insurers have built up reserves to cover them, Hyde said.

“The thing about aviation crashes ... is that they involve a lot of people at one time,” he added, “but they are very few and far between.”

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