The insurance crisis facing Hess Oil is the same crisis that has faced home, condominium and property owners and businesses in the Virgin Islands before — but never of this magnitude. The inability to get insurance is, in great part, caused by politics and politicians and those lawyers who feed off the misery of others and encourage their avarice and greed by filing frivolous lawsuits or making outrageous demands, whether or not there is liability.
That no company will insure this refinery could eventually cause its closure some day. That would be an unfortunate result of those politicians and others with complete insensitivity and lack of appreciation for the refinery and what it has done for the residents of our island. Tens of thousands of people over the years have benefited from the refinery being here. Many of them had migrated from all over the Caribbean to work here, to be trained here, to use the hospitals and schools of the Virgin Islands, and all of them should support the refinery.
These opportunities would never have been available before without Mr. Leon Hess's decision to build the original HOVIC refinery here and, more recently, without PDVSA's decision to invest in the refinery to enable it to build the coker and continue to operate here.
Although politics and greed are the primary causes of the inability of Hovensa to secure insurance, this entire situation begs for tort reform capping damages and limiting liability — not further increasing it, as the governor has done by not vetoing the anti-arbitration bill. If we want to get new businesses, it will never happen when they inquire about what happened to former businesses and their insurers that have left and continue to leave our islands at an alarming rate, leaving individuals, their residences and businesses uninsured.
Not vetoing the anti-arbitration sections of the bill recently passed by the Legislature merely adds fuel to the fire that has been driving insurance companies from the territory and causing our premiums to skyrocket. The legislation passed is clearly not in the best interests of V.I. businesses or their employees and their families.
Many large employers obtain, or attempt to obtain, insurance that would cover not only personal injury lawsuits but also employment practices lawsuits such as wrongful discharge. We are aware of only one insurance company who wrote such an Employment Practices Primary Insurance Policy for a large employer in the territory but, after two years defending numerous such lawsuits, has refused to renew the policy or write any others here. This refusal was due directly to the territory's large jury verdicts (which, in turn, lead to large settlements).
The act passed banning pre-dispute arbitration agreements will cause insurance companies that write employment practices coverage never to write such policies for businesses in the Virgin Islands.
These companies will continue to choose jurisdictions other than ours so long as the Virgin Islands has the reputation as "The Wheel of Fortune Jurisdiction" and "The Lottery Jurisdiction." When will some of our politicians, lawyers and labor leaders wake up?
Several years ago there was a crisis with respect to medical professionals in the Virgin Islands and the difficulty in obtaining medical malpractice insurance. The fear was that if doctors could not obtain insurance because juries awarded such high verdicts, physicians would leave the islands and no doctor would want, or be able, to practice here. As a result of this very real threat, legislation was passed — tort reform — that placed a cap on the amount of damages one could recover in a lawsuit against a doctor or hospital for medical malpractice. We must do this with other suits as well.
The time has come to realize that this same threat is looming over all businesses and employers in the territory. If employers cannot obtain liability insurance, they will leave the territory, and new businesses will not relocate or open in the Virgin Islands. We should not turn a blind eye to the fact that many other jurisdictions are competing with us to create incentives to bring new businesses and jobs to their citizens, and that businesses have migrated, and will continue to migrate, to more favorable jurisdictions if a current location becomes economically unviable.
Clearly, Hovensa desires to maintain operations here, as is proven by the recent joint venture and over a billion-dollar investment Hovensa made in the Virgin Islands with the construction of the cat cracker and coker plants. We should support Hovensa to ensure that the Virgin Islands continues to be economically viable for all of our people — not just a few lawyers.
That no company will insure this refinery could eventually cause its closure, which would be a true tragedy. The large jury verdicts, and now this legislation that attempts to ban arbitration agreements, all indicate a complete insensitivity and lack of appreciation for the refinery and what it has done toward improving life for all Virgin Islanders and the community.
Politicians now need to show the insurance companies that their fears are unfounded, by engaging in meaningful tort reform measures, including the capping of damages and limiting liability among those sued so that a defendant is liable for only that portion of the total damage in proportion to the liability attributed solely to that defendant and no other defendants, as now happens under the present law.
Britain H. Bryant
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