Wreckage of EgyptAir Flight 804 found – what it means for insurance

Investigators say a ship has found the main wreckage sites for the doomed aircraft, which crashed last month over the Mediterranean Sea

by Deena Kamel Yousef, Bloomberg, and Caitlin Bronson

Investigators found the main wreckage sites of EgyptAir Flight 804, which crashed last month over the Mediterranean Sea with 66 people on board. 

A search team provided images of the Airbus Group SE A320 jetliner’s remains to authorities, Egypt’s Ministry of Civil Aviation said in an e-mailed statement Wednesday, without specifying the locations. The wreckage was found by the John Lethbridge, a vessel from Deep Ocean Search Ltd. that joined the hunt to scan the ocean floor, the ministry said.

The discovery marks a significant step forward as investigators seek the cockpit-voice and flight-data recorders that are essential to piecing together what caused the Cairo-bound flight from Paris to fall from the sky. The so-called black boxes are expected to continue emitting signals until June 24, according to the aviation ministry. Without the pings, which were initially detected two weeks ago, locating the devices becomes more difficult.

It will also have bearing for the lead underwriter for the plane, XL Catlin, which insured the $18 million hull.

Officials have said the crash was “almost certainly the result of terrorism,” and the discovery of the plane may aid that final determination. And of course, the eventual insurance payouts from XL Catlin will depend largely on that cause.

If it does appear that the crash was a deliberate act of terrorism, it must be certified. If that is in dispute, it may be difficult for insurance companies to settle payouts.

For example, the gunning down of Malaysia Airlines Flight 17 near the Russia-Ukraine border complicated insurance coverage due to a “wartime exclusion” that is often included in aviation hull and liability policies. While it is unlikely the EgyptAir crash was the result of an act of war, certain other exclusions—perhaps for terrorism —may apply.

Liability costs may also vary depending on victims’ nationalities, as governments differ over how citizens can sue airlines for damages.

The loss of the EgyptAir jet is just the latest in a long line of aviation tragedies in recent years, including two Malaysia Airlines crashes and the purposeful crash of a Germanwings aircraft last year.

Searchers “will draw a map for the wreckage distribution spots” and “plan how best to handle the wreckage in the coming period,” the ministry said in the statement.

Radar images show the plane bound deviated from its course, veered sharply left and then rolled to the right in a complete circle before plunging into the sea, according to Egyptian investigators, confirming earlier statements from Greek officials. The aircraft also broadcast a series of error messages minutes before contact was lost. The crew didn’t send a distress signal.

The U.S. National Transportation Safety Board joined the Egypt-led investigation this month. The probe also includes French air-accident specialists. The French ship La Place earlier received signals from the seabed in the search area, Egypt said.

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