Liabilty insurance vs LDS
- Thread starter Paladin
- Start date
Please register or login
Welcome to ScubaBoard, the world's largest scuba diving community. Registration is not required to read the forums, but we encourage you to join. Joining has its benefits and enables you to participate in the discussions.
Benefits of registering include
- Ability to post and comment on topics and discussions.
- A Free photo gallery to share your dive photos with the world.
- You can make this box go away
Sounds like insurance companies in any business. But I do see that using parts not specifically designated for a piece of equipment by the manufacturer as an opening for a lawsuit. It is only a matter of time before a lawsuit happens.
As always - from the other side of the counter...:
Please do not underestimate the power of insurance companies. If a Local Dive Shop refuses to do something for liability reasons then I'm sure they will be happy to discuss the reasons why: certain parts of this world require workers on a construction site to wear helmets even though they are simply surveying an empty field under nothing more than clouds - a friend of mine was in fact fired for doing just that. People can sue McDonalds for ordering a hot cup of coffee that was - ya know - actually hot - so imagine how much liability is involved if somebody has an out-of-air emergency and it turns out the last person to fix the regulator didn't have a specialist qualification to do so.
So back to diving. Can I service a reg? Yeah of course - it's easy. Can I change the battery in a dive computer? In many cases - yes of course - do I offer this as a service? Nope. Why? Because I don't have a ticket from scubapro/seacsub/suunto or whoever.
I always draw an analogy with the car industry. Could I service your car? Yup - I'm a good hobby mechanic - but it will invalidate your warranty if I did.
Therefore I don't - if you all see what I mean. Please don't be offended if your dive shop refuses to do something for you, even though you know what you are doing.
Cheers,
C.
Please do not underestimate the power of insurance companies. If a Local Dive Shop refuses to do something for liability reasons then I'm sure they will be happy to discuss the reasons why: certain parts of this world require workers on a construction site to wear helmets even though they are simply surveying an empty field under nothing more than clouds - a friend of mine was in fact fired for doing just that. People can sue McDonalds for ordering a hot cup of coffee that was - ya know - actually hot - so imagine how much liability is involved if somebody has an out-of-air emergency and it turns out the last person to fix the regulator didn't have a specialist qualification to do so.
So back to diving. Can I service a reg? Yeah of course - it's easy. Can I change the battery in a dive computer? In many cases - yes of course - do I offer this as a service? Nope. Why? Because I don't have a ticket from scubapro/seacsub/suunto or whoever.
I always draw an analogy with the car industry. Could I service your car? Yup - I'm a good hobby mechanic - but it will invalidate your warranty if I did.
Therefore I don't - if you all see what I mean. Please don't be offended if your dive shop refuses to do something for you, even though you know what you are doing.
Cheers,
C.
It includes boat, inland lakes and waterways, ocean, vacations/travel etc. We also teach first responders which increases it quite a bit as you need to carry a minimum liablility that is acceptable to the feds and state agencies, as well as a bunch of specialities including trimix (extra cost), deep (extra cost), tech, (extra cost), rangers and childrens camps (extra cost).... you get the point.
It would probably be cheaper if we just did open water certs and sell/service stuff. (that would cost only around 5K). You also get an extra charge for each instructor or dive con of which we have seven, and this is where the price skyrockets. Its a bit ridiculous..
It would probably be cheaper if we just did open water certs and sell/service stuff. (that would cost only around 5K). You also get an extra charge for each instructor or dive con of which we have seven, and this is where the price skyrockets. Its a bit ridiculous..
When I was running my dive center, for 6 years up until last, I had to have third party liability cover on my boats. Not hull insurance, not mechanical cover, just third party. For three open skiffs ranging from 26ft to 28ft this cost around US$30k a year. Business liability cover was only available as a top layer, once I had liability cover and hull insurance. I don't remember what it cost as I didn't have it, nor did anyone else I knew - way too expensive. But think in terms of an insurance bill for the boats only of over US$60k.
I was the only dive shop here that qualified for DAN Europe Dive Shop insurance, which covered all my 14 staff against claims from customers and cost around US$1500/year, for a very high level of cover. All other shops here had to get American cover which was only available by named individual and cost something like 4 or 5 times as much.
I also had a retail shop and sold and serviced equipment. I had no insurance of any sort on that because I simply couldn't afford it. The best I could have got would have been restricted liability cover, at a very high price.
On no part of my business did I have business continuity cover. It's available, but with so many restrictions and caveats you're unlikely ever to meet the conditions to be able to claim. And with very small payouts if you do qualify. And for my business, with a retail shop in town, a dive shop over the water, a costly compressor setup elsewhere on land, and five boats always on the water, this cover was astronomically expensive - I seem to recall upwards of US$50k/year for cover which was so low it wouldn't really have helped.
With those sorts of costs and relatively low customer numbers because not many people come here (maybe 1/10 of the people who visit Playa del Carmen alone) and cut-throat competition I gave up the uneven struggle. I know for certain that several of my competitors who offer fairly low prices and get glowing reviews don't even have the legal minimum cover. They do however in many cases have boat hull cover, as that is what really matters to them. But customer liability? - nah!
I was the only dive shop here that qualified for DAN Europe Dive Shop insurance, which covered all my 14 staff against claims from customers and cost around US$1500/year, for a very high level of cover. All other shops here had to get American cover which was only available by named individual and cost something like 4 or 5 times as much.
I also had a retail shop and sold and serviced equipment. I had no insurance of any sort on that because I simply couldn't afford it. The best I could have got would have been restricted liability cover, at a very high price.
On no part of my business did I have business continuity cover. It's available, but with so many restrictions and caveats you're unlikely ever to meet the conditions to be able to claim. And with very small payouts if you do qualify. And for my business, with a retail shop in town, a dive shop over the water, a costly compressor setup elsewhere on land, and five boats always on the water, this cover was astronomically expensive - I seem to recall upwards of US$50k/year for cover which was so low it wouldn't really have helped.
With those sorts of costs and relatively low customer numbers because not many people come here (maybe 1/10 of the people who visit Playa del Carmen alone) and cut-throat competition I gave up the uneven struggle. I know for certain that several of my competitors who offer fairly low prices and get glowing reviews don't even have the legal minimum cover. They do however in many cases have boat hull cover, as that is what really matters to them. But customer liability? - nah!
Today, I drove to the only dive shop close to my home to buy some silicone grease for my regulators. When I got there, the LDS owner informed me that he no longer carries silicone grease and uses only Christo-Lube. I asked him why and he said it is because of his liability insurance. His insurance company claims that, since he serves Nitrox divers as well as plain old air divers like me, having silicone grease in the shop creates a situation where a tech might accidentally use the wrong lube in a Nitrox regulator. So, in order to keep his insurance cost down, he uses only Christo-Lube for everybody.
Further, in order to be able to afford liability insurance for his business, he no longer rents any equipment of any kind to anybody. He cannot even supply gear for the students he trains. Instead, he includes a complete, basic package in the price of his classes. Unfortunately, he says, this cuts way down on the number of potential students who sign up for OW class. Instead, he is pretty much limited to teaching advance classes to those who already have their own gear. He cannot even rent tanks or other equipment to certified divers. To do so would triple his insurance premiums.
He asked me why I was looking for silicone grease and I told him it was so I can clean and lube my regulators. He asked me what kind of regs I have and I told him I have two Aqua Lung Aquarius and one Aqua Lung Conshelf XI. I expected him to argue that I should not be servicing my own regulators be he just nodded. He then told me that he could not service those regulators because of, yeah, you guessed it, liability insurance. He cannot get the "official" parts for those regulators from Aqua Lung and, even though parts from other regulators can be substituted, as in the case of the Conshelf, the liability issue prevents his doing so. If, he says, he were to service an obsolete regulator using parts not specifically tagged for that regulator, then the owner has an accident (even if the accident had nothing to do with the regulator), if it were to get out that he (the LDS owner) had serviced the regulator with "non official" parts, it would open him up for a nasty lawsuit. As a result, he will service only equipment that is currently being supported by the manufacturers of that equipment. So, he does not criticize those of us who choose to service our vintage equipment ourselves. In fact, he believes the policies of the SCUBA manufacturers and the insurance industry are practically forcing divers to consider this option. Most of the cost of regulator service goes toward liability insurance, which helps to explain the $100+ service charges discussed on another thread.
He then asked me where I was getting the parts for my regs and I told him about VDH. He wrote down the info to pass on to the numerous other divers who come into his shop with old Aqua Lung regulators needing service.
We then discussed the heavy reliance on equipment (BCDs, computers, alternate air, etc.) during dive training and the absence of teaching the old ways such as buddy breathing, emergency ascents and the like. He, personally, would prefer to teach diving in the old style with instruction on the new equipment added as good measure. However, his insurance provider dictates that he cannot teach the old skills because of the chance that a student might panic during a buddy breathing or emergency ascent exercise or get the bends from misreading a dive table.
He ended our conversation lamenting the sad fact that the insurance industry is limiting his ability to do business in a way that would be fair and economical to his customers.
So, guys, next time you go into your LDS and you think the prices are too high or the service is a bit limited, you can thank the insurance industry for at least part of it.
Read between the lines. Basically what he is saying is that he's broke and going to have to close shop soon and in doing so filled you full of hot air.
Froid
Contributor
Rant Begins,
I have been involved with the insurance industry in some capacity for the last 15 years. Some of the claims that I have been involved in would make you shake your head in disgust.
More than once, I have had the Insurance company attorney tell me to just settle the claim to limit liability exposure. I have had video evidence of the claimant water skiing when two days before he was in a wheelchair in court. The arbitrator said to me " he must have had a good day"
Needless to say, I have gotten out the adjusting/manager side of the industry and gotten into the software side. I was getting just a little bitter.
With this all said, I can totally understand why this individual would not want to service, rent regs or anything that might open him up to litigation. I would never own a LDS, work on scuba equipment, be a DM, or an instructor. I greatly admire those who do and have no issue paying for their services.
Rant Completed
Froid
I have been involved with the insurance industry in some capacity for the last 15 years. Some of the claims that I have been involved in would make you shake your head in disgust.
More than once, I have had the Insurance company attorney tell me to just settle the claim to limit liability exposure. I have had video evidence of the claimant water skiing when two days before he was in a wheelchair in court. The arbitrator said to me " he must have had a good day"
Needless to say, I have gotten out the adjusting/manager side of the industry and gotten into the software side. I was getting just a little bitter.
With this all said, I can totally understand why this individual would not want to service, rent regs or anything that might open him up to litigation. I would never own a LDS, work on scuba equipment, be a DM, or an instructor. I greatly admire those who do and have no issue paying for their services.
Rant Completed
Froid
- Messages
- 6,921
- Reaction score
- 25
- # of dives
- I just don't log dives
Insurance companies are a lot like banks, and just like banks, they're misunderstood.
If you go to a (sane) bank for a mortgage, they evaluate you as to the probability that you'll pay back the loan, then set the interest rate according to their risk, or if they feel you're an unacceptable risk, will refuse to give you the loan.
This isn't because the bank is being an a**-****, it's because your current and prior actions and financial condition makes you a poor risk (not "you" specifically).
The same thing goes for insurance companies. If they walk in and see that your service bench consists of vice-grips, a hammer and a box of generic o-rings you found on eBay, or that your fill station or tank inspection process is error prone or poorly maintained, they will adjust your rates according to the risk they perceive, or simply refuse to insure that aspect of your business.
In fact, this is a good thing, because like credit, if the insurance company discovers things they don't like, you shouldn't like them either, since they're almost certainly dangerous and need to be changed.
If the business owner in question made huge changes to his practices to improve quality and consistency and reduce the chances of an incident, I'm almost certain he could get insurance for much less than his current price.
Terry
Similar threads
