PADI getting sued over Insurance Program

[Thalassamania]

I wish PADI no ill. I also do not like attorneys enriching themselves which causes all of us to pay more for our goods and services. The tone of some against PADI is a bit too gleeful. PADI has made diving accessible to many and I certainly would not want to see them fail.

As far as PADI not being upfront with their finances in regards to insurance - was this really to gouge people, or to offer insurance at a less expensive rate by having the organization responsible for their (contributing) members?

Again, we should be careful about judging others and watch our "glee" when others get into trouble. Someday the shoe could be on the other foot. My hope is that this case would get straightened out with minimal expenses and all could be sure of their coverage. But in a country which pays out thousands of dollars to attorneys and a person who spills hot coffee on themselves - well, anything can happen.

I would suspect, from what I know of the industry and the history of diving liability insurance that when the dust settles we will find that (or will strongly suspect that) the $2.5 million (or more each year) went into peoples' pockets.

If the prospect of finding that out and catching some folks with their hand in the cookie jar causes me some glee ... well, I'm sorry, but I've been waiting for this to happen for over three decades. I'll just be sorry if it is Drew, I always liked him.

 

[MauiScubaSteve]

You may remember that at the beginning of this year that new Cue Cards were required for DSD's?

And that the True/False "quiz" had been changed?

And that the DSD skills had been changed to include a "BCD Inflate/Deflate" skill?

These changes, as well as the exlcusions to coverage that "Thalassamania" quoted on page 11 of this thread came about as a direct result of the DSD's death that was referred to by "PRL".

Just a couple nits to pick;

As I understood it we are required to use the new Flip Chart; were/are we required to use Cue Cards?

The old "illegal" flip chart next to me has a "BCD inflation at surface" panel and a "BCD deflation at surface" panel; were those not skills back then?

 

[drdaddy]

I would suspect, from what I know of the industry and the history of diving liability insurance that when the dust settles we will find that (or will strongly suspect that) the $2.5 million (or more each year) went into peoples' pockets.

If the prospect of finding that out and catching some folks with their hand in the cookie jar causes me some glee ... well, I'm sorry, but I've been waiting for this to happen for over three decades.

I agree with you. Glee at "catching the hand in the cookie jar" and the reform that will/should follow is just fine with me. It was the death wish for PADI that I thought was a bit over the top.

 

[Thalassamania]

Death wish for PADI? Naw, better to chasten and reform the devil we know than play with the devil we don't know.

 

[Wookie]

I agree with you. Glee at "catching the hand in the cookie jar" and the reform that will/should follow is just fine with me. It was the death wish for PADI that I thought was a bit over the top.

If you are talking about my comment "this could be enough to bring PADI down" in post number 7 as being a death wish, you are sadly mistaken. I am a member of PADI in good standing, and intend to remain that way. One of my very best friends from my wife's childhood works at PADI, and I certainly wish PADI no death wish. I was merely making an observation that, like the lawsuit involving ScubaBoard, these types of suits are horrifically expensive to fight, and, while I'm sure PADI is profitable, their pockets aren't bottomless. I'm sure Hornsby and the bunch on the top floor have already burned through tens of thousands of dollars, not just in direct billings, but in lost revenue as well as not being able to do their real jobs while meeting with council. The bad press alone will amount to another tens of thousands of lost business. If they are judged against, they could very well be toast.

The sad part is that I'm sure that there are those gunning for PADI. Think for a minute what the loss of PADI would mean, just for instructors who are already not making any money. They would have to crossover to another agency. If they moved to NAUI, say, and their shop moved to SDI/TDI, they need to find a new shop. They need to find new insurance, maybe when they've just paid theirs with V&B. and it isn't just one instructor, there are likely 10,000 active teaching instructors in the US, and 50,000 DM's. Somebody will have to process all those professionals in a very short period of time. Shops would have to dump their stock of teaching materials, advertising materials, and get all new.

I think that any "glee" that you read in this post have to do with someone finally taking on the old guard. DEMA and PADI have kept the scuba industry moribund and stagnant. They have done this because the system that they have created works for them, not necessarily for the industry as a whole. Since it works for them, they've resisted any change that would help the industry grow.

 

[The Chairman]

There are one or two POV Warriors here who would like to see harm come to PADI. In reality though, most everyone here on ScubaBoard is connected to PADI in one way or another and DON'T want to see any harm come to them.

I did not read any hint of "glee" in Wookie's post. He's not like that. No, he doesn't pull any punches and will simply tell it as he sees it, but he does not delight in anyone else's tribulations.

I don't pretend to understand this suit, and I am not sure that I want to. ScubaBoard enjoys a long history of supporting ALL of the Scuba Agencies, and I don't see a need to change that now.

 

[Walter]

The whole concept of liability insurance is that it covers liability for negligence, which by definition entails not following the standards.

Not necessarily. What if the standards are negligent?

Someone suggested that PADI does not have the money to cover the SIR on liability policies.

I think they suggested it is possible. I think it's unlikely. While PADI is small in comparison to Fortune 500 companies, they are far from a mom and pop operation. I suspect they aren't hurting.

There are one or two POV Warriors here who would like to see harm come to PADI.

I doubt anyone wants to see PADI hurt. There are several people who would love to see them raise their standards, but that's all.

 

[Rhone Man]

PADI might not be too big to fail, but the brand is too valuable an asset to discard. Even if PADI was to go into Chapter 7, I am sure that the rights to the name and the logo would be sold off (probably together with the intellectual property rights to all their materials and client lists). In some shape or form the improbable logo of a diver carrying a flaming torch would still be with us.

But I think we are getting ahead of ourselves...

 

[PhilEllis]

If PADI is in fact paying claims (as it appears they are), I don't see a big issue with the master policy approach. It should simply be more clearly explained in the policy certificate documents, and a reserve should be funded as required by state insurance regulations.

However, if their practice violates insurance regulations, I fear they might get hammered on this one.

Phil Ellis
DiveSports.com

 

[Rhone Man]

If PADI is in fact paying claims (as it appears they are), I don't see a big issue with the master policy approach. It should simply be more clearly explained in the policy certificate documents, and a reserve should be funded as required by state insurance regulations.

However, if their practice violates insurance regulations, I fear they might get hammered on this one.

That is the thing about unjust enrichment claims. The hypothetical defendant can turn around and say "What are you complaining about? You got everything that you paid for, at the price we had agreed!" But the essence of such claims is that the defendant made a profit in an illicit/illegal/immoral way so must disgorge the profits which it made in such unlawful fashion.

A really simple example might be if you paid an insurance broker $500 to put a fire insurance policy on your building, but instead of placing the policy, they just pocketed the cash. A year passes. Your house does not burn down. But then you learn they never arranged the cover - they just spent the cash. You are outraged. They say "What are you complaining about? Your house didn't burn down, so you didn't lose the benefit of any claim, and you paid the premium either way." For various legal and moral reasons, the courts don't want the insurance brokers to have incentives to do this, so they allow the unjust enrichment claim.

I am not trying to draw a parallel with the PADI case - just showing you a situation where someone can have a legitimate claim despite suffering no financial loss.