Titan Sub Disaster Raises Question Over Who Insured OceanGate for Voyage

While the search for the five passengers of the missing OceanGate sub continues, experts are weighing in on who can ultimately be held responsible when such a high-risk expedition goes wrong—and whether the passengers' families would eventually be able to sue the company.

As of 5 a.m. ET on Thursday, the five passengers aboard Titan, the OceanGate advanced submersible vessel which went missing on Sunday on its way to explore the wreckage of the Titanic, have most likely run out of breathable air.

Rescuers have been racing against time to find the vessel since Titan lost contact with the surface about an hour and 45 minutes into its two-and-a-half-hour descent to the most famous shipwreck in the world, which lies around 370 miles off the coast of Newfoundland, Canada.

But despite being encouraged by hearing banging sounds from the depth of the Atlantic Ocean, rescuers still struggled to locate the vessel.

Five people are aboard the sub: Stockton Rush, CEO of OceanGate, a private company organizing deep-sea expeditions, French submersible pilot Paul-Henry Nargeolet, billionaire British explorer Hamish Harding and Pakistani businessman Shahzada Dawood and his son, Suleman Dawood.

Since they were submerged in the Atlantic Ocean, the vessel had 96 hours of oxygen available for five people. They are expected to have run out of breathable air by early Thursday. As of Thursday morning, the search for the missing vessel continues.

Who Is Liable for the Disaster?

While the assumption would be that OceanGate will be held responsible for whatever happened to the five passengers—including the company's CEO, who was serving as the vessel's pilot—the legal technicalities around Titan complicates the situation.

OceanGate, a Washington-based company, asked all its passengers to sign waiver forms releasing them of any responsibility, even in case of death, before embarking on a dangerous deep-sea expedition.

The company's compliance with international safety law is also a complex and muddy affair, full of loopholes. Salvatore Mercogliano, an associate professor of maritime history at Campbell University in North Carolina, said that a submersible like Titan, unlike ships or other vessels, is largely unregulated.

It does not require "to be registered in a country and therefore follow specific laws that are governed by international conventions, such as the Safety of Life at Sea (SOLAS), which was promulgated as a result of the Titanic sinking," he told Newsweek.

While submersibles like Titan would have to comply with the Passenger Vessel Safety Act in the United States, the OceanGate vessel didn't do so because it was operating in international waters, Mercogliano said.

"The submersible industry is large, with many commercial vessels used in deep-sea drilling and cable laying," he said. "There are agencies, such as the American Bureau of Shipping that provide classification [third-party] oversight of submersibles and one of OceanGate's submersibles falls under ABS. However, Titan did not."

Titan was, by OceanGate's own admission, not classed—a process that assures ship owners, insurers, and regulators that vessels are designed, constructed and inspected to accepted standards.

"When OceanGate was founded the goal was to pursue the highest reasonable level of innovation in the design and operation of manned submersibles," the company says on its website. "By definition, innovation is outside of an already accepted system. However, this does not mean that OceanGate does meet standards where they apply, but it does mean that innovation often falls outside of the existing industry paradigm."

Will OceanGate Be Sued?

The victims' families will likely struggle to sue the company, according to legal experts, as all passengers traveling on the vessel are asked to sign a waiver that specifies the risk of dying during the expedition.

"Federal maritime law would govern whether the waivers are valid," Kenneth Abraham, a distinguished professor of law at the University of Virginia, told Newsweek. "But by analogy, in most states, the waivers would be valid in this situation, and depending on their wording the waivers would bind the families too."

"But the waivers probably would not apply to the makers of the submersible, if they were not the same entity who was operating it," he said. "The makers might be liable if they caused any malfunction, though that too would depend on their wording."

Los Angeles personal injury attorney Miguel Custodio, co-founder of Custodio and Dubey LLP, told the Daily Mail that the only way families could sue OceanGate is if it was proven that the incident had been the result of the negligence of a crew member.

Attorney Sherif Edmond El Dabe, a partner with El Dabe Ritter Trial Lawyers, told Insider that "The chance of family members of the passengers having a successful lawsuit against the company is close to zero."

He added: "The passengers knowingly participated in an extremely hazardous activity and they knowingly assumed great risk."

The waiver signed by the passengers, according to reports, mentions clearly that the "experimental" vessel had "not been approved or certified by any regulatory body, and could result in physical injury, emotional trauma, or death"—an aspect that has been under the spotlight as search for Titan began earlier this week.

Who Insured OceanGate?

Mercogliano said that he would be curious to know what company insured OceanGate, "because it is usually the insurance company that will require a classification society to ensure that the submersible meets all the requirements before insuring them."

"There is also a question of liability that goes back to not just OceanGate but operator of the parent vessel, Polar Prince, as that vessel is Canadian flagged and based," he added.

OceanGate has not publicly shared any information about what firm is covering insurance for the deep-sea expeditions company. Newsweek reached out to OceanGate via email for comment on Thursday.

"There is probably liability insurance covering the various entities and individuals involved, and that could cover any liability that was not precluded by any waiver, depending on its wording," Abraham said.

'End of the Brand'

"No matter what the outcome of the currently perilous situation, this spells the end of the brand OceanGate," Andy Barr, a PR and brand expert at 10Yetis.co.uk, told Newsweek.

"Too much has now been revealed about the historic alleged issues that the brand has encountered and is alleged to have also ignored," Barr said. "When all is finally revealed, the brand's only option will be to sell its IP and assets to another company or completely rebrand, although the latter seems a hugely unlikely and unrealistic option."

The tragic incident which has consumed itself in the past four days will also have an immediate impact on the industry of deep-sea expeditions.

"All deep-sea expedition companies will now be urgently reviewing their own processes, paying particular attention to making sure their own crisis communications plans are up to date," Barr said.

"We have to remember that the nature of deep sea exploration carries a natural inherent risk, but the onus has to be on the companies involved to make sure they are going above and beyond when it comes to employee and passenger safety."