Insurance Questions

DISCLAIMER   I am not an attorney, therefore any information provided is not legal advice. It is purely information based on my conversations with Insurance Provider Representatives, as well as my experiences.   I am not an insurance broker or agent. I cannot define specific coverages. It’s important to note, that all incidents – which may lead to a potential legal claim, have unique facts and circumstances that may determine coverage. 

Objective Not the be all know all presentation on insurance.   Fill in gaps and clear up some of the unknowns. Not to be bias.

Sources Representative from Witherspoon Representative from Vicencia & Buckley   Sent each the same questions and scenarios.

Changing insurance. Should an individual keep the same insurance Changing insurance.   Should an individual keep the same insurance? What is the risk of changing insurance companies? Price- When switching professional liability carriers, it is important to consider the actual policy that you are purchasing. While your certification agency might accept another companies policy, the actual coverage might be completely different. Some important coverage areas to consider include: ·         Deductibles. The industry standard is no deductible. Policy form- Claims made or Occurrence).  Industry standard claims made policy, you must have insurance in place when the claim is filed against you. Therefore if you retire or take time off, you must purchase tail or retired coverage to maintain insurance in the event a claim is filed up to the statute of limitation in your state.  Occurrence policy, you must have insurance in place when the dive accident occurs. You only need to purchase insurance while you are teaching or supervising. Policy limit. The industry standard is $1 million per occurrence with $2 million aggregate. Whether defense is inside or outside the limit. Some policies include defense coverage in the occurrence limit and other policies have a separate limit for defense. It is best advised to purchase a policy with defense outside of the limit so you maintain your occurrence limit for any potential settlement. Retro-active coverage date. When switching your insurance, make sure that the new company will recognize your prior coverage and that their retro-active date is sufficient for your states statute of limitation.(Must be no gap in coverage.) Who will defend you. Make sure you know who your insurance company would assign your case to and that they have experience specifically in dive law. This includes the investigator and attorney. The more experience the team, the better. Does my policy cover multiple certification agencies. If you have multiple agencies, make sure that ALL of your classes are covered. Some of the certification agency specific insurance policies will only cover you while you are teaching classes for other agencies that fall within the standards of the agency the policy was designed for.

Coverage If an instructor does not teach for x amount of time should they still carry insurance? If you are on a claims made policy, you should carry tail or retired insurance until the statute of limitation runs out in your state from the last time you worked professionally.    If you are on occurrence policy, you only need insurance while you are teaching or supervising.

Equipment Insurance Should an Instructor insure their equipment if they loan it to students? Yes.    For an individual dive professional, an equipment endorsement generally only cover up to a certain number of equipment sets for students only. If you are allowing certified divers to borrow your equipment, you are not being covered. A dive store’s GL policy is the only coverage that I am aware of that would cover certified divers AND students renting equipment. This is referred to as Products and Completed Operations coverage.

Individual Versus Group Policy Let me first explain the differences between the individual and group policies. The individual policy covers the named insured (i.e. the dive professional) with their own policy limit. This means that you can work for a shop or independent and you are covered with your own personal limit. The group policy only covers you when you are teaching for the named insured (i.e. the dive store) and all of the scheduled dive professionals share a single policy limit. The only benefit of a group policy over an individual policy is the potential premium savings. I say potential because the individual is a flat rate premium and the group is based on different variable such as gross receipts, number of dive professionals and number of certifications issued.

Situations: 1.  Instructor only teaches students provided by the shop, using shop provided equipment and facilities. (Pool is contracted but is included in facilities). Either 2.  Instructor teaches students that they recruit. Student pays instructor and the instructor pays the store to use facilities and equipment. Instructor retains students folders.  Individual 3.  Instructor teaches his own recruited students, not using any of the store facilities or equipment. Teaching at a quarry or some other location. Individual

Instructor does a combination of both, teaches store customers, and recruits their own. Individual if you are going to teach part time for a dive shop(s) and you have an individual policy, make sure the you ARE NOT added on the shops group policy. If you have two policies that cover the same risk and a loss occurs, each policy only pays 50%. One policy could deny coverage, exclude coverage or provides less coverage. Make sure to add the store as an additional insured to protect their interests and everyone wins.