U.S. Airlines Plan to form Company to Insure against Terrorism

According to the Los Angeles Times, U.S. airlines are formulating a plan to have a company in place to insure themselves against terrorism and acts of war with premiums set around half the rate private insurers have charged as a result of Sept. 11.

The company is set to include AMR Corp.’s American Airlines Inc., UAL Corp.’s United Airlines, along with other members of the Air Transport Association.

The Los Angeles Times report notes that airlines will be offered liability coverage of as much as $1.5 billion for each occurrence by Equitime, the new insurer for the plan. Coverage will drop for passengers from the $1.33 they currently pay to 50 to 70 cents.