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Wouldn’t be the first time I missed the obvious with this question: Why can’t the increase in insurance be passed on to the customers?
“It could reduce the number of concessioners or increase the cost [of outfitter services to visitors] to the point where customers who typically would buy the service now don’t have the ability to because it is too costly,” says Lynch. “Or they strike out on their own, which is more hazardous.”
NPS must approve any increase in pricing. Most outfitters and guides will have significant increase in premiums as the extended soft market comes to an end of 30% or more, the additional limits will not be cheap and you can only pass on so much to the customers.
$500,000 X 1000 = $500,000,000
“It’s the Arithmetic”- Bill Clinton
L Ferguson- a numbers challenged loss control guy.
That’s 1000 percent, not 1000.
Seems to me that Aon did the “prudent” thing, to recommend higher limits…of course, that lets them off the hook for the $4.5 mil claim…NPS cannot come back and say “We bought what you recommended, now pay the diff!”
If Aon said $25 mil would NPS have taken out the rubber stamp on that, too?
In response to the above comment, there’s only so much additional overhead (e.g. insurance, taxes) that a business owner can push down to customers without affecting their willingness to keep using the products and services.
Increasing insurance requirements at the .gov level can also be a strategy specifically intended to discourage participation in an activity. For example, higher liability insurance coverage requirements are used to push shooting ranges outside of some city limits.
IT would seem that if their is almost no risk needing the higher limits the cost of the higher limits woudl work out to be quite low. Im not taking a positon one way or another as I only know what is in this article, but it would seem that many of these businesses are subject to very serious accidents up to and including permanent total diability and death. $500,000 ain’t much these days. Congress could always pass some type of statutory cap/limit on tort claims couldnt they?
The AON report is probably accurate however, the majority of the small businesses are just that,small and they cater to and have an exposure involving very few people and then mostly a “product liability” exposure for food, drink or souvenirs. Someone, in their typical infinite/political insurance wisdom seems to have figure that if a $1,000,000 is good then $5,000,000 would
certainly be better.
Obviously NOT!!
I’m sure these concessionars have “Hold Harmless” and/or “Waivers” signed by their customers. Do these not hold up in court?
The yahoos claim they “didn’t realize what they were signing”, etc., yada, yada, yada. So the court just hands them a paycheck. (And what’s with the the thumbs down? It just a question!)
Sounds like a power play by the ‘big boys’ with the money for force the mom & pop operations out of business. Who has access to the markets AON & other mega brokers.
They just keep trying to put the little guys out of business.
OF COURSE AON WANTS $5MILLION; THEY GET THE PREMIUMS!
Even at 5M limits these accounts are typically too small to get attention of national brokers.
More Big Government and cronyism with Big Business (big money doner) shutting out small business…all part of this administration plans.
One example where the higher limits would be appropriate would be with respect to wildfires started in some manner by the operator. The costs, just for fire suppression, can easily surpass the $500K amount and would likely surpass the $5M as well.
If all operators are required to purchase higher limits, then the additional costs could be shifted in partially to the customers as there would be a level playing field for all operators.
A second issue might be an increase in insurers willing to provide the increased limits once they know that they have a larger potential customer base. This would also lead to lower prices in the medium term as more entrants would enter the market.
The cost of alleged liability arising from a wildfire is potetnailly beyond what anyone will actually carry as limits. The fires of last year in Bastrop Texas have generated over 150M in demands and any negligence is questionable.
AON owns K&K and did provide O&G coverage in the 90′s with TIG insurance the loss ratio today is over 9000% so it a bit confusing how AON doesn’t even know the troubles they caused in the 90′s with a short sighted approach, now as a consultant they are covering their own butt! And K&K cant provide the coverage AON is recommending
It’s not ‘big guys’ versus ‘little guys’ here. The biggest company in the industry said this would hose them too.