My painful insurance lesson.
I had the wonderful opportunity to work for an exclusive dive operation that catered to high-end customers. We were a team of four – two instructors and two divemasters. On one particular trip, the thing we all dread occurred – one of the divers was severely injured. John was participating in a specialty training dive with me as the instructor and Sally (also an instructor) was serving as a certified assistant. Divemaster Ben was with our group and Divemaster Owen was aboard the boat helping divers enter and exit the water.
As John was boarding the boat following the dive, the fingers of his dominant hand ended up between the ladder and the boat, resulting in one amputation and de-gloving of three other fingers. We were able to provide immediate first aid and John was transported to the nearest medical facility for treatment.
John was hospitalized for a couple weeks as he contracted a severe infection while in the hospital. In addition, there were months of physical therapy and it was unknown whether John, the father of four, would be able to return to the operating room. You see, John was a chief of neurosurgery at a large hospital.
Obviously, worry set in. While our team did everything we could, and our actions did not contribute to the severe infection, we were concerned. We talked openly with our insurance and risk management team and prepared for the worst.
John’s annual income was more than $600,000 US. And, he was the sole breadwinner for his family. Estimates were that if a suit were to be filed, the damages (loss of income, medical expenses, pain and suffering, permanent disfigurement, etc.,) would be well in excess of $1,000,000 US. However, with potentially at least four of us listed as defendants (not considering the boat, boat owner, tour booking company, etc. – you know the drill), we expected our collective insurance policies would place $4,000,000 US on the table. Being responsible, prudent dive pros, we had each purchased our own insurance coverage, paying the full premium, with a Certificate of Insurance and Declarations Page saying we each had $1,000,000 US in coverage. . . until you read the fine print.
We were told (and shown in black and white) that the policy language stated, regardless of the number of insureds (four of us), the most the policy would pay was $1,000,000 US for any one incident. WHAT?!?!?
So, what did we pay for? We were not insured under a group policy, but each submitted our application and our premium to the insurance team with the expectation that we would each have $1,000,000 in coverage.
As it turned out, John did not file a lawsuit. He acknowledged that he had some contribution to the incident, but he did suffer terribly and it was nearly a year before he was able to fully work again. During this time Sally, Ben, Owen and I also suffered – the emotional stress of not knowing if and when the axe will drop.
Read the fine print. If you don’t understand something – ask. Ask for a comparison of the insurance policies you are considering. Do your homework. Don’t just blindly buy the cheapest or the newest from the new guy on the block.
Note: In the above scenario, the PADI-endorsed program would provide $1,000,000 US in coverage for each dive pro, plus unlimited defense costs.*
*Subject to policy terms and conditions.