...[T]he comment about not having insurance being somehow a good thing is just plain wrong.
I haven't been practising law as long as you, but I am going to respectfully disagree with that comment.
A friend of mine (who is not a wealthy person) recently started offering some kind of ante-natal classes out of her home. She asked me if I thought she should get liability insurance. I told her no. As things stood, only a crazy person would sue her, because she would never be able to satisfy even a modest judgment. However, if she has the deep pockets of insurers standing behind her, she suddenly becomes a very attractive target for litigants.
Wow. I strongly agree with DivemasterDennis. And respectfully disagree with RhoneMan. (I've only been practicing law for 18 years, so compared to DivemasterDennis, I'm a newbie
.)
I don't understand how one could suddenly become a very attractive target for litigants merely by having insurance. Nor do I understand how, even assuming that is true, that means it's better not to have insurance.
First, how would any potential litigants even know whether a person has an insurance policy covering a given situation? Actual litigants typically find that stuff out
in litigation -- that is, after they've already sued the defendant. So - let's suppose Lisa Litigious ("LL") sues 5 different people after some dive-related accident (because it's likely that in any such accident, multiple parties will be sued). And, let's suppose that when LL finds out in discovery that only 3 of the 5 defendants have insurance policies, she may focus on those 3 going forward. Depending on the situation, however, LL is at least as likely to keep the other 2 in the case as not -- for a wide variety of reasons.
E.g., it doesn't cost her much more to keep in additional defendants, it eliminates the need to get subpoenas for them as witnesses while pursuing case against the remaining defendants and, besides, LL is mad at the world, and she is going to "take it out" on everyone she can.
Second, even if LL
did voluntarily dismiss the 2 uninsured defendants, they're still stuck with a bill for their legal defense fees incurred getting to that point in the case. Their life has already been disrupted. If they're in federal court, their name is
already tied to the case for any person conducting a search in PACER. And, given that many state courts now have online dockets, their "connection" to the case is publicly available from a variety of free searches. Not only that, but their live
will continue to be disrupted. I mean, given that they were somehow involved in the incident, they likely will have to testify at depositions (which means they'll need an attorney anyway, paid out of their pocket). Their records may be subpoenaed anyway (which means they'll need an attorney to review the documents before production to protect them from inadvertently disclosing something that could create liability). They may well still have to appear at trial, if the case ever gets that far, to serve as a witness. If the case has been publicized, their name is
already connected to the incident and lawsuit in the press.
So are the 2 dismissed defendants
really better off than their insured co-defendants remaining in the case??
Let's see: Instead of remaining parties to the case --- with (a) insurer-paid attorneys, (b) insurance for a possible settlement or judgment, and quite possibly (c) at least some of the other parties "sharing" the defense load under a joint defense agreement --- the uninsured defendants get dismissed. Great!! Now they just have to find the money necessary to cover the defense bills incurred up to dismissal, plus the defense costs they will incur when they appear as a witness, plus defense costs they'll incur when their records are subpoenaed. Is that
really a better place to be?
To be clear, I don't think the typical person/DM/Instructor needs to take out a $5MM policy or anything of the sort. But I strongly agree with DivemasterDennis that it's "just wrong" to think that one is better off not having insurance. I would add that -- imho -- it's far more important to ensure that the policy covers defense costs than how much the policy's payout limit is upon liability. Insurance covering defense costs is, imho, the primary reason to have a policy. Chances are actually quite small that any given person will get hit with a huge judgment. And, while I believe that chances are slim that the typical diver/DM/instructor will get sued, the risk of being sued is higher than the risk of being found liable. I wouldn't want to take the chance that I'd get stuck with huge defense bills.
The annual cost of, e.g., an individual
PADI Divemaster Insurance Policy, with
unlimited defense costs, is about $320 per year. It's worth noting that -- depending on where a person lives -- the $320 that one "saves" by not buying insurance just-maybe-might-if-one's-lucky cover somewhere between 1 and 1.5 of the
n hours that an attorney will spend defending any lawsuit that occurs.