PADI getting sued over Insurance Program

[cerich]

Anybody have any details what this is about?

Reading between the lines it looks like "if" the allegations are true PADI may have run afoul of insurance laws...



"For immediate release....
Released on: 10/26/2010

On October 15, 2010, a lawsuit was filed against the PADI organization, its insurer -- Lexington Insurance Company, and its insurance broker -- Vicencia & Buckley Insurance Services, relating to the insurance program PADI endorses for its member dive shops.

The lawsuit has no merit and is premised on a number of factual inaccuracies. For example, it alleges that PADI is acting as the primary insurer under the dive store insurance program it endorses when, in fact, the primary insurer is Lexington Insurance Company, an A-rated insurance company. In addition, the lawsuit falsely alleges that PADI is collecting insurance premiums under the program.

Because this lawsuit is without merit, PADI has requested that it be voluntarily dismissed and intends to move for sanctions against the plaintiff and its attorneys if it is not voluntarily dismissed. Former PADI counsel, Rick Lesser, is one of the attorneys that brought this lawsuit. PADI believes that its decision to sever its relationship with Mr. Lesser may be a motivating factor behind this lawsuit.

PADI wishes to reassure all dive centers that are participating in the insurance program that they are indeed covered by a bona fide, licensed insurance company. Dive stores that purchased coverage have received a certificate of insurance verifying their coverage though Lexington. Any PADI member participating in the insurance program that wishes to discuss their coverage or obtain a replacement certificate of insurance can contact Vicencia & Buckley Insurance Services or PADI directly.

“Sadly, this is not what the dive industry needs right now, nor ever,” says PADI Senior Vice President Al Hornsby. “This type of negative and wasteful action only serves to distract the dive industry and drain the positive energy and forward progress.”

For more information regarding this message, please contact Al Hornsby at 800 729 7234 or +1 949 858 7234, ext. 2390 or Steve Vicencia at 800 223 9998 or +1 714 739 3177, ext. 219."

 

[scubamarketing]

I'm not sure which lines we're supposed to read between, that was a typical PADI statement which accepts no blame or responsibility. We'd need to see the other side of the story. Based on this information, it sounds like someone blamed PADI for an insurance issue and PADI is correctly saying "we don't sell it, just recommend it". It'll definitely be interesting to follow though.

 

[Scott L]

Sounds like an improper disclosure issue. Probably, as stated, a vengeful action by Mr. Lesser...

 

[The Chairman]

Sadly, this is not what the dive industry needs right now, nor ever,” says PADI Senior Vice President Al Hornsby. “This type of negative and wasteful action only serves to distract the dive industry and drain the positive energy and forward progress.”

I feel your pain Al. I feel your pain.

 

[Thalassamania]

Rick Lesser is a pretty bright guy.

Diving insurance has been a scandal for decades.

I don't know that the two go together at this time, but time will tell.

Insurance scams and greed are what got DAN's management into trouble, perhaps now it's PADI's turn (not that they are any more guilty than many others, just a bigger and likely slower moving target having lost the profit/non-profit case, the Walter case and the Don Dibble case.

Doc, you may feel Al's pain, but you've never been a Playgirl centerfold.

 

[Scott L]

Rick Lesser is a pretty bright guy.

Diving insurance has been a scandal for decades.

I don't know that the two go together at this time, but time will tell.

Insurance scams and greed are what got DAN's management into trouble, perhaps now it's PADI's turn (not that they are any more guilty than many others, just a bigger and likely slower moving target having lost the profit/non-profit case, the Walter case and the Don Dibble case.

Doc, you may feel Al's pain, but you've never been a Playgirl centerfold.

There is a big difference. DAN's owner is also the principal owner of the insurance carrier they utilize. Lexington Insurance is a totally separate entity than PADI with no ownership commonality. They are a wholly-owned subsidiary of AIG Holdings...

 

[Wookie]

I've read the court documents filed in the suit. If the allegations are true, PADI is in a world of hurt, and I'm glad I haven't used V&B in a number of years, else I'd be pissed. This could be big enough to bring PADI down, again if the allegations are true. It also appears that Rick is having his way with them.

Yesterday I tried to call my insurance agent to get his opinion. The lines were too busy for anyone in the agency to answer phones. I'd guess that dive shops are leaving V&B in droves.

 

[Walter]

What are the allegations?

 

[Cave Diver]

Rick Lesser is a pretty bright guy.

I've heard the same about Rick. From what I understand about him, I don't think he'd bring a suit that he didn't think he could win or settle. This should be interesting to watch.

 

[theduckguru]

I've read the court documents filed in the suit. If the allegations are true, PADI is in a world of hurt, and I'm glad I haven't used V&B in a number of years, else I'd be pissed. This could be big enough to bring PADI down, again if the allegations are true. It also appears that Rick is having his way with them.

Yesterday I tried to call my insurance agent to get his opinion. The lines were too busy for anyone in the agency to answer phones. I'd guess that dive shops are leaving V&B in droves.

Frank, can you post a link?