Liability insurance is coverage that every dive shop and dive professional should have in order to protect against possible negligence claims. Individual dive instructors may purchase their own coverage (IPL) or, if you work for a store, it may cover you under a group professional liability (GPL) policy. What’s the difference, and do you need both?
You may need both, depending on the scope of the professional services you provide. If you provide services only as an employee or contractor for the shop, the group policy could be enough. But you should be aware of the following limitations:
The coverage you get from a GPL policy issued to the dive shop protects you only when you’re training students or leading dives for that dive shop. It won’t help you if you decide to take on direct-pay students of your own, if you engage in divemaster or other professional activities outside your regular employment at the dive shop, or if you act as a “good Samaritan” or rescuer when in the vicinity of a diving accident or emergency. You can be sued individually just for being a dive professional, and if you’re not working for the shop at the time you would have no coverage.
While the coverage issue is important, those under a GPL policy should also be aware that the policy limit is a shared limit.
Everyone who works for the dive shop who is listed as staff shares in the same limit regardless of the number of claims or the number of dive professionals involved in an incident. The standard coverage under the DAN RRG policy has a $1,000,000 limit per event ($2,000,000 with excess cover). This is most important in two situations:
First, when there are multiple staff involved in the same incident. Under the GPL policy, there is a joint limit for all the staff (whether one or 10). If the damages exceed $1,000,000 ($2,000,000 with excess cover), the staff members may be held personally liable.
Second, when the shop has incurred a previous loss that erodes the available limit. Even if that prior claim involved different members of the staff, any payment made for a prior claim will reduce the limit by an equal amount. If claim #1 was resolved for $500,000, that would leave only $500,000 for claim #2.
Each of these situations would be best addressed by the dive professional having an IPL policy. Each individual policy would have a separate $1,000,000 limit, and there would be no sharing of the limit or erosion of the limit (unless a prior claim was made under the IPL).
Consider all these factors when choosing which coverages and policies are right for you and your situation. The liability insurance professionals here at DAN can provide you with expert advice and help you customize an insurance program that is right for you. If you have any questions, contact us at +1-919-684-2948 or .