The insurers of Deutsche Lufthansa, parent company of the Germanwings airline, are facing potential complications thanks to the varying international status of the passengers aboard the downed plane as well as the unusual circumstances surrounding the crash.
In the wake of new evidence suggesting the 28-year-old pilot, Andreas Lubitz, purposely crashed the plane and caused the deaths of its 150 passengers, potential liability payouts as well as settlements for victims’ families could vary widely.
Although the 1999 Montreal Convention guarantees airlines must pay families up to $170,000 per victim in the case of accidental death or injury on international flights, French prosecutor Robert Alpert Sr. suggests that Lubitz’s actions may leave Lufthansa—and its insurers—responsible for greater payouts.
“It is sad, it is tragic, but it is extremely straightforward,” Alpert said in an interview with the
New York Times. “The airline and its insurer should quickly handle the payments to the families. Particularly in light of the fact that they apparently dropped the ball in monitoring this pilot’s physical and mental well-being.”
That could leave
Allianz, which leads the pool of carriers insuring Germanwings, responsible for about $350 million in payments to families of the passengers.
The amount per family, however, will differ substantially based on several factors. Families of passengers with children or other dependents, for example, will be paid a larger settlement than those of elderly or childless passengers. Home country matters, too. National courts have final say over how much money is appropriate, according to the Montreal Convention, and some countries do not allow compensation for wrongful death cases.
And because of the circumstances surrounding the crash, it is almost impossible that Germanwings and its insurers will be able to extricate itself from claims of negligence.
“The airline has unlimited liability unless it can prove it is free from fault,” Steven Marks, a partner at aviation litigation firm Podhurst Orseck, told the
Wall Street Journal.
Lubitz was discovered to have been suffering from depression and had been excused from work by a neuropsychologist during the period he locked the pilot out of the cabin and crashed the Germanwings flight into the French Alps.
Although the airline was not aware of the doctor’s note, it is likely to bear some responsibility for “inadequate psychological monitoring” and failure to instigate a two-person cockpit rule, according to Marks.
Allianz confirmed on Friday that it retains the liability element of Germanwings’ policy regardless of Lubitz’s actions. It did not disclose claims estimates, however, or its reinsurance status.
