A US state prosecutor's decision to charge an airline maintenance company with murder could impact on aviation insurers.

Prosecutors in Florida have laid that criminal charge and a lesser one of manslaughter against SabreTech Inc. three years after the crash of a DC-9 Valujet killed 110 people in the Florida Everglades.

Three SabreTech employees have also been indicted on separate charges of conspiracy, making false statements to federal regulators and mislabelling and mishandling hazardous material.

The company is challenging a $2.25 million fine slapped on it by the US Federal Aviation Administration (FAA) for improper handling of oxygen canisters which are alleged to have sparked the fatal fire.

SabreTech's lead insurer at the time of the crash, British Aviation Insurance group, has declined to comment on the case. Valujet's coverage was led by aviation insurance pool US AIG.

But US law firm Wilson, Elser, Moskowitz, Edelman & Dicker partner Franklin Bass has warned the case could raise the financial stakes for insurers as well as sending a chill down the collective spine of corporate bodies.

"This investigation could give rise to possible punitive damages in Florida, and that, depending on whether it is insured or insurable under Florida law, could create much higher exposure for the insurers,'' he said.

But he pointed out that murder charges were criminal acts by definition and not very often insurable acts.

"It is a problem for the insurer and the insured business when you have a third party which is now conducting an investigation and comes to the conclusion an intentional act was done and that investigation could impact coverage.'' The Florida law suit accuses the maintenance company of not packing oxygen generators on the plane properly.

It is alleged that the generators were packed without the proper safety caps and falsely labelled as being empty.

Investigators claim that the caps could have prevented the generators from exploding just after take-off, leading to a fatal fire on board.

Lawyer Mr. Bass stressed that a mere indictment was a far cry from a conviction.

"Even if there is a conviction at trial, this would most assuredly lead to an appellate review.''