In 1998 I made one of the dumbest mistakes of my life: I opened up a taxi company. I loved to drive so I thought I would moonlight a couple of days a week as a cab driver and it was kind of fun. However, I had been the CEO of a health insurance company. When the owner of the company started having problems making payments on the cars, I went to bat for him at the bank. The bank, knowing me from my insurance days, saw their chance to incorporate a person with business knowledge into this small business and would not budge unless he made me a partner so he simply walked. Suddenly I found myself running a company I knew little about.
Since I lived my life in insurance I went to the company’s insurance agent whom I did not know. I wanted to make sure that we were aptly covered to meet state and city requirements. The insurance agent assured me we were in compliance.
I was even further convinced the company was well-insured when I received a letter from the city saying we were alright.
You can imagine my shock when one of my drivers called me on the phone and said he had been asked by the owner of another cab company to see his insurance certificate and then laughed and said, “You idiots are under-insured and I’m telling the city!”
I put a call into the department of the city that handles the licensing of taxis. They further assured me that we were fine. However, the next morning our local newspaper carried a headline on the front page of the “local news” section of the paper which is Section B. It read (I paraphrase): “Several local cab companies operating illegally; not enough insurance.”
The amount of coverage we carried per accident with personal injury codicils as I recall was $300 thousand. The state of Illinois had raised it to $350 thousand.
It was a setup. The aforementioned cab owner had called the newspaper, not the city. The City Manager was unaware of it as well. What had happened was that his insurance agent happened to be diligent and stayed on top of changes as they occurred. My agent and the agents of all other companies were not on top of things because of the city’s ignorance.
I spoke to the reporter who wrote the condemning article and she admitted that the city was at fault but would not write a retraction. She said my options included writing a letter to the editor or suing the paper. Or, I could sue the other cab company owner for his stunt. I also called the insurance company that insured me. They wanted no part of the situation saying that the insurance agent “was an independent business man.”
My lawyer said everything legal would be a waste of time. It would cost more money and take more time for the money that might be recouped.
I went in front of the City Council and asked for their intervention. While they would commiserate, they systematically did nothing.
My company lost three major commercial accounts. They were companies who thought, despite my pleading, I was irresponsible.
The insurance agent who failed me could have been sued. Unfortunately he was associated with the bank that had the note to all of my cars.
That’s my tale of woe with respect to dealing with an insurance company that let me down, along with many, many others.
I got taken to school and re-learned the lesson “You cannot fight City Hall.”