PADI getting sued over Insurance Program

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BTW: You don't have control over gross negligence. Otherwise, it would not be called "negligence." "Conscious disregard" is a whole different story (note the word "conscious").

And, in most instances, liability insurance covers gross negligence as well as simple negligence.

Each person must individually weigh the cost of liability insurance against the risk of what is likely to happen if something bad happens and he or she does not have liability insurance. Please recall that part of why David Swain is in prison in the BVI is because after the debacle of the civil suit against him, the BVI authorities decided to re-examine the criminal case against him.
 
I'm seeing what I think is a lot of misinformation here.

1. I doubt that any insurance policy would say that it does not cover liability if it arises because an instructor did not follow the standards. The whole concept of liability insurance is that it covers liability for negligence, which by definition entails not following the standards.
There has always been the thought out there (I don't know it it is actually true, but based in cases that I've been involved in I doubt it) that if you teach outside of standards then your insurance is null and void.
2. Someone suggested that PADI does not have the money to cover the SIR on liability policies. Is there any actual evidence of this?
This has been suggested to me by industry insiders based on three things, the first is that the industry is said to be down 55% this year, the second is difficulty that PADI seemed to have to make an $88K pay out on a fire loss (the thing that started this whole business) and the third is the allegation that PADI recently had a big round of layoffs. The reality of the situation is, as far as I know, unknown.
3. Re defense only insurance ... I'm not offering insurance, but, if a large group of DMs or instructors approached me and offered me a sufficient yearly retainer to be available to act as defense counsel, at say $10 per hour, should any of them be sued as the result of a diving injury, I would strongly consider it. (The $10 would be so the client would have a "dog in the fight" should there be litigation.) Otherwise, the PADI program seems to be pretty competitive without having ever demonstrated an inability to actually cover the SIR.
Their legal problem seems to stem not form a demonstrable difficulty to cover the SIR (which may or may not be the case) but rather their lack of having demonstrated (as required by law) their ability to do so before the fact.
 
BTW: You don't have control over gross negligence. Otherwise, it would not be called "negligence." "Conscious disregard" is a whole different story (note the word "conscious").
That is a semantic argument, not a real one. Gross negligence is a legal concept which means serious carelessness. Negligence is the opposite of diligence, or being careful. If you are always careful and have proper checks in place, carelessness (and thus negligence) is really not an issue.

Most of what I seen described as gross negligence could have as easily be described as conscious disregard, but I suspect that gross negligence is easier to prove.
And, in most instances, liability insurance covers gross negligence as well as simple negligence.
I don't think that anyone is saying otherwise, the question is: are actions that might be considered conscious disregard of standards covered?
Each person must individually weigh the cost of liability insurance against the risk of what is likely to happen if something bad happens and he or she does not have liability insurance. Please recall that part of why David Swain is in prison in the BVI is because after the debacle of the civil suit against him, the BVI authorities decided to re-examine the criminal case against him.
I think that each person should have that choice, I feel that when I buy insurance I am basically subsidizing other instructors carelessness.
 
Responding to Thal:

Although I have not read the specific policy, my educated guess is that teaching outside the standards does not negate coverage unless it is teaching a specialty for which the instructor has not been certified as an instructor, e.g. cave diving where the instructor has not been trained in how to teach cave diving.

As far as PADI's delay in paying the specific claim that triggered the latest lawsuit, It could just as easily have been that someone did not see the loss as being worth what the insured claimed as an inability to pay. Here, I have special expertise. For some 20 years I defended insurance companies that were being sued over their claims handling, either because they would not pay, would not pay as much as the insureds wanted or did not pay as quickly as the insureds wanted. Based on this, I would not be a bit surprised if there were issues relative to the claim that resulted in the delay, rather than PADI's ability to pay.
 
Here are the exclusions:

In addition to the specific exclusions contained in the policy,
this insurance does not apply to:

X) Any claim arising out of any “occurrence” in which the insured
knowingly permitted the uncertified student involved in the claim
to leave the immediate area during in-water instruction without
supervision and the attendance of an instructor or a certified
assistant.

Y) Any claim arising out of any “occurrence” in which the insured
left or permitted the uncertified student involved in the claim to be
unattended during in-water instruction and/or testing.

Z) Any claim arising out of any “occurrence” involving a
recreational training or supervisory dive conducted by an insured
that is planned for depths greater than 40 meters/130 feet;
planned with mandatory stage decompression (safety stops are
acceptable); or planned using gas mixes other than compressed
air, or enriched air unless all students are previously certified
divers or are participating in an open water diver course with an
enriched air training option.

This exclusion (Z) does not apply to any insured when Technical
Diving coverage is indicated on the insured’s certificate of
insurance.

AA) Any claim arising out of any “occurrence” involving a
technical training or supervisory dive conducted by an insured
that is planned for depths greater than 80 meters/265 feet; or
planned using gas mixes other than compressed air, enriched air,
oxygen, or trimix.

BB) Any claim arising out of any “occurrence” in which the
insured failed to obtain a medical history form completed by the
student involved in the claim, prior to in-water instruction; and
in the case of a minor, the failure to have obtained the minor’s
parent’s or guardian’s signature on the medical history form.
Furthermore, this insurance does not apply if the medical history
form indicated any condition contrary to safe participation in diving
activities, and the insured failed to require the student to obtain
medical approval (based on a medical examination) by a licensed
physician, who is not the student, prior to in-water instruction.

CC) Any claim arising out of any “occurrence” during a training
dive in which the insured had not first obtained from the student
involved in the claim a signed release of liability/assumption of
risk form developed or approved by the certification organization
through which the training was offered; and in the case of
a minor, the failure to have obtained the minor’s parent’s or
guardian’s signature on the form.

DD) Any claim arising out of any “occurrence” during a technical
training dive in which the insured had not first obtained from
the student involved in the claim a signed release of liability/
assumption of risk form developed or approved by the certification
organization through which the technical training was offered,
specifically stating that the student acknowledges that the training
involves technical dive training.

EE) Any claim arising out of any “occurrence” involving scuba
instruction provided by the insured to a student under the age
of ten (10), except for courses taught in confined water (e.g.
swimming pools), which may be offered to anyone age eight (8)
and older.

FF) Any claim arising out of any “occurrence” involving instruction
in which the insured instructor and/or Dive Center/Resort
Operator has not maintained records for the purpose of recording
the progress of the student involved in the claim.

GG) Any claim arising out of any “occurrence” involving
instruction in which the insured instructor and/or Dive Center/
Resort Operator has not maintained records for the purpose of
evaluating the understanding of the instructional material by the
student involved in the claim.

HH) Any claim arising out of any “occurrence” involving instruction
in which the insured instructor and/or Dive Center/Resort
Operator has not retained all records relating to the individual
student involved in a claim, for a minimum of five (5) years.

II) Any claim arising out of any “occurrence” involving the
insured’s conduct of an introductory experience program (any
program designed to introduce uncertified divers to recreational
scuba diving via a supervised, controlled open water dive
experience) that was not in accordance with Recreational Scuba
Training Council (RSTC) standards. This exclusion does not apply
to confined water-only experiences being conducted by properly
certified divemasters, assistant instructors and instructors.

------------------------------------------------------------

V&B claims in their advert that:

No general standards warranty, so coverage
is not subject to the insurance company’s
interpretation of general training standards.*
Does the policy you’re considering include the
following restrictions?

“… the Insured shall ensure that all diver training
activities comply at all times with current standards,
procedures and policies.”

Would you find it fair to have an incidental
violation of any ‘standard, procedure or policy’
used as grounds by the insurance company to
void your insurance coverage after an accident?
The list of coverage exclusions in the PADIendorsed
insurance policy is clear and precise

– there is no guessing about your policy.
 
Responding to Thal on #103:

In my experience, "gross negligence" is closer to "ordinary negligence" than to "conscious disregard."

Ordinary negligence is hitting a golf ball poorly such that it hits someone. Gross negligence is not looking to see if anyone is at risk of being hit.

Negligence is designing a new compact car and failing to realize a rear-end collision would likely cause the fuel tank to rupture. Conscious disregard is deciding not to change the design or to recall cars that were subject to this malady.

Driving while intoxicated constitutes "conscious disregard."

In California, at least, to find someone is liable for negligence or even gross negligence, a jury can make the finding no matter how slightly the balance of evidence tips in favor of the plaintiff. But, to find conscious disregard, there must be "clear and convincing" evidence.

As far as subsidizing other instructors, the entire premise of insurance is that the risk of a loss is shared among a large number of insureds. So, yes, you are subsidizing them... just as they are subsidizing you.
 
I'm not sure about the other exclusions, but:

1. I'm very impressed by the policy and I would be hard pressed to complain about the coverage being provided, except that ...

2. Exclusions FF, GG and HH use the term "and/or." That term should NEVER EVER be used in an insurance policy. IMHO, it renders those exclusions ambiguous and likely unenforceable. Does it mean both the instructor and resort must keep the records ("and") or does it mean that one or the other or both must keep the records? My guess is the second and I would not like to be the insurer if it denied coverage because one but not both kept records.
 
2. Exclusions FF, GG and HH use the term "and/or." That term should NEVER EVER be used in an insurance policy. IMHO, it renders those exclusions ambiguous and likely unenforceable. Does it mean both the instructor and resort must keep the records ("and") or does it mean that one or the other or both must keep the records? My guess is the second and I would not like to be the insurer if it denied coverage because one but not both kept records.

At my last PADI seminar the topic of risk management was covered extensively. Scenarios from real cases were given. They all seemed to make the point that the instructor does not have to maintain his own copies of waivers and medical forms but needs to verify that they are on file with the shop. In one scenario, an instructor was called by a shop and asked to meet a customer at the boat the next morning to be her dive guide. She died. Turned out the person at the shop had not collected her waivers or checked her c-card. Making sure the student signs the assumption of risk and medical form (and checks it) were really emphasized.
 
Not necessarily, a good defense is expensive and if (as it appears) PADI does not have the money in the bank to cover the defense (up to the first $300K) then I would guess it would be in their interest to decide that you were outside of standards and that therefore they have no obligation to you. And you know something? With standards that are as detailed and exact as PADI's, that set both a top and a bottom, I'm sure that I could find a way to show that almost every course is "outside of standards" in at least a minor way.

That's what I was trying to say. The co-defendant's on a case can be as adversarial to each other as to the plaintiff. One needs to watch out for their own interests and not rely on PADI or the dive shop backing them up.
 

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