The Quebec Train Wreck – Another Underinsured Disaster ?
The Quebec train disaster raises yet again the issue of underinsured or uninsured business operations. According to the latest story, the CEO now is starting to say the company may lack adequate insurance.
Uninsured or underinsured entities create losses for the direct victims of disasters, as well as for entities that end up being targeted as co-defendants because the primary defendant lacks the money to pay. These types of risks are recognized and addressed to some degree by state laws that require insurance in some settings. For example, state laws that mandate minimum automobile insurance. Or state laws that require physicians to carry minimum amounts of medical malpractice insurance, or that require lawyers to carry legal malpractice insurance. One has to wonder why some industries lack "nudges" or laws sufficient to cause purchase of adequate insurance or maintenance of ample cash reserves.