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LONDON -- Claims for valuable cargo aboard a Swissair passenger jet that crashed off Canada earlier this month could starting hitting the insurance market as soon as this week.
Until then, however, London market underwriters are keeping tight-lipped about potential claims for cargo that included a Picasso painting, cash and jewelry.
The Boeing MD-11 crashed into the ocean near Peggy's Cove, Nova Scotia, on Sept. 3, killing all 215 passengers and 14 crew members. Flight 111 from New York to Geneva, Switzerland, was nicknamed the "United Nations airbus" because so many UN staff regularly used the flight. Nine people from various UN agencies were on the jet that crashed.
The shoreline search for crash debris was expected to conclude late last week.
Among the items known to have been aboard the ill-fated aircraft was a Picasso painting en route to Switzerland from New York. Shipping documents valued the painting, called "Le Peintre," at $1.5 million, a spokesman for Swissair confirmed. Along with other high-worth cargo, the painting had not yet been recovered from the water, but the airline spokesman did not expect it to have weathered the accident. The picture was packed in a safe container with an aluminum door that was designed to deter theft, not to withstand shock, water or fire, he explained.
The airline's liability for any cargo it did not directly insure is subject to Warsaw Convention limits of $20 per kilogram (about 2.2 pounds), said the spokesman.
A consignment of watches about Flight 111 had been insured with Swisscargo, a sister company to Swissair, but its value has not been disclosed. It weighed 2 kilograms (about 4.4 pounds).
Other valuable items included 49.8 kilograms (about 109.6 pounds) of bank notes being sent from a U.S. bank to a Swiss branch of the bank, 1 kilogram of diamonds and 4.8 kilograms (about 10.8 pounds) of jewelry. Swissair could not provide values for any of these items. The cargo is not expected to have survived the crash, though the plane's wreckage has not yet been retrieved.
Robert Read, underwriter for Hiscox P.L.C. syndicate 33, a specialist in the fine art insurance field, would not comment on the loss, refusing to disclose whether the syndicate was involved in covering some of the cargo.
In addition to the valuable items, Flight 111 was carrying almost 14,500 kilograms (about 31,900 pounds) of general cargo, including textiles, machinery replacement parts, express mail and regular mail. A spokeswoman for the United Nations refused to confirm reports that a diplomatic pouch destined for the U.N. offices in Geneva was on the plane.
Polygon Insurance Co. Ltd., one of two captive insurance companies sharing the hull and liability coverage for Swissair along with Pentagram Insurance Co. Ltd., has confirmed the hull to be a total loss, insured for $126.5 million.
A liability reserve has yet to be established, though London market sources put the value at anywhere between $300 million and $700 million, reflecting the possible high claims filed by the families and dependents of the individuals on board. In addition, there is speculation at Lloyd's of London that personal accident claims for some of the people on the plane soon will start filtering in to the market.
The cause of the accident remains unknown. Both the flight data recorder and the cockpit voice recorder cut off 6 minutes before the plane crashed, indicating the possibility of a total system failure.
So far, none of the wreckage on the ocean floor has been brought to the surface. Instead, a team of about 180 divers is concentrating on retrieving the bodies, some of which already have been identified.
"Operation Persistence" is being coordinated by the Canadian Navy Maritime Command Atlantic, aided by the Canadian Coast Guard. The Transportation Safety Board of Canada has investigators on site to try to establish the cause of the tragedy.
Dave Lenckus contributed to this report.