My instructor used to say "don't be so worried about the law, be more concerned by what the insurance company thinks".
He certainly wan't advocating breaking the law but drawing attention to the fact that insurance doesn't cover you when you are breaking the law (he was referring to taking off over weight, busting minima, ignoring flight and duty times, etc).
If, in fact, it is found that the pilots were acting ilegally, then it will be interesting to see what kind of claims there might be made against their estates!
Doctors and other professionals have malpractice insurance - not sure if there is any available for pilots!