Fifteen people managed to get to safety after the storm hit.
Ansa news agency reported a 35-year-old mother held her one-year-old daughter in her arms in the sea.
The woman, named as locally as Charlotte Golunski, said: “For two seconds I lost the little girl in the sea, then I immediately hugged her again amidst the fury of the waves.
“I held her tightly, close to me, while the sea was stormy. Many were screaming.
“Luckily the lifeboat inflated and 11 of us managed to get on board.”
The baby is fine and the mother was treated with stitches, the agency said.
She added she had been on the boat with her husband, who is also safe, and colleagues from a London company.
A doctor based at the Di Cristina Hospital in Palermo, where some of the survivors were taken, said they were “very tired” and “constantly asking about the missing people”.
Dr Domenico Cipolla told Reuters news agency: “We have given the survivors this information, but they are talking and crying all the time because they have realised that there is little hope of finding their friends alive.”
Survivors said the trip has been organised by Mr Lynch for his work colleagues.
In the initial aftermath, a nearby Dutch-flagged vessel rescued survivors from the waves, tending to them until emergency services arrived.
Captain Karsten Borner said after the storm had passed, the crew noticed that the yacht that had been behind them had disappeared.
“We saw a red flare, so my first mate and I went to the position, and we found this life raft drifting,” he told Reuters.
That life raft was carrying 15 survivors, three of whom were “heavily injured”, he said.
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