December 14, 2019

One of the Dumbest Things I’ve Ever Heard …

D.C.’s transit system is bracing for liability lawsuits arising from a spectacular head-on crash that occurred in June 2009. The crash killed nine and injured 80. (For recent story, see http://www.washingtonpost.com/wp-dyn/content/article/2009/07/11/AR2009071102660.html)

None of this surprises me. In fact, being a claims guy, one of the first things I think about when hearing about such an event is the wave of litigation.

What caught my eye was a quote from the transit system’s former CFO and Maryland Board member Peter Benjamin. Deriding the prospect that the transit system would have to pay claims from its own funds, confident that the transit system has adequate coverage to address the flood of claims, Benjamin is quoted as saying, “The probability of having to pay enormous sums of money is relatively low. Our insurance rates will go up.”

Huh???

Sorry, but the judges and juries doling out awards could care less if your insurance rates go up. Your insurance rates going up is not check on jury awards, settlements or recoveries. It is an after-effect of those events.

It’s like saying,

“If I drive drunk and kill someone, I can’t get a big award against me because GEICO would raise my rates.”

“If my Rottweiler mauls the postman, I’m in the clear because Nationwide would jack up my premium.”

I can only hope that Benjamin was misquoted or that this comment was taken out of context. Otherwise, the Metro transit system may find itself digging into its own coffers if liabilities exceed their insurance layer. One thing is for certain – the prospect of rising insurance costs will not act as any “brake” on settlements or jury awards stemming from the June 2009 crash.

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