Deaths of commercial divers are a tragic reality of one of the world’s most dangerous professions, and these fatalities have significant financial consequences for dive companies. The costs extend beyond simple payouts, encompassing lost productivity, legal fees, and reputational damage.

Commercial Diver Fatalities: Actuarial Data & Statistics

Commercial diving is an inherently high-risk occupation.1 The Centers for Disease Control and Prevention (CDC) has reported that between 1989 and 1997, there were 49 occupational diving fatalities among an estimated 3,000 full-time commercial divers.2 This equates to a rate of 180 deaths per 100,000 employed divers per year, which is over 40 times the national average death rate for all workers.3 More recent data from the Bureau of Labor Statistics reported 39 fatal occupational injuries for commercial divers from 2011 to 2017.4

The causes of these deaths are varied and often stem from a combination of factors.5 The most common include:

• Gas-supply problems: Issues with air or gas mixtures leading to asphyxia or gas embolism.6
• Entrapment/entanglement: Divers getting caught in lines, nets, or submerged structures.7
• Equipment failures: Malfunctioning regulators, buoyancy control devices, or other critical gear.8
• Pre-existing medical conditions: Cardiovascular events, particularly in older divers.9

A substantial portion of these fatalities are attributed to human error, with a lack of proper training and safety measures being a significant contributing factor.10

The Cost of a Commercial Diver’s Death

A commercial diver’s death is a catastrophic event for a dive company, with a complex and severe financial fallout. These costs can be broken down into several key areas:

• Legal & Payout Costs: The most direct cost is the payout to the diver’s family or estate. The exact amount of a payout can vary widely depending on the circumstances of the case, including the diver’s age, income, dependents, and the specifics of the accident. These claims are often litigated under maritime law, such as the Jones Act or the Longshore and Harbor Workers’ Compensation Act (LHWCA), which can entitle the injured diver or their family to “maintenance and cure” and other forms of compensation.11 Average insurance payouts for fatal accidents can be substantial, with many claims settling for hundreds of thousands or even millions of dollars, though specific, universally applicable averages are hard to pinpoint due to the private nature of these settlements.
• Business Interruption & Investigation Costs: Following a fatal accident, operations are typically halted for a thorough investigation by regulatory bodies like the Occupational Safety and Health Administration (OSHA) or the U.S. Coast Guard. This can lead to a significant loss of revenue. The company also incurs costs from internal investigations, legal defense, and potential fines for safety violations.
• Increased Insurance Premiums: A fatality is a major red flag for insurance companies. After a death, the dive company will almost certainly face a dramatic increase in its insurance premiums, particularly for its general liability and workers’ compensation policies.
• Reputational Damage: The death of a diver can severely damage a company’s reputation, making it difficult to secure future contracts, especially with clients who prioritize safety. It can also lead to a decline in employee morale and difficulty in recruiting qualified divers.

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Insurance and Actuarial Perspective

For insurance companies, commercial diving represents a high-risk category, and premiums and coverage are calculated based on extensive actuarial data. Actuaries analyze historical fatality and injury data to determine the likelihood and severity of future claims. For commercial diving, this analysis highlights the high-risk nature of the profession, which is reflected in the high cost of insurance for dive companies.12

The actuarial data confirms that age, fitness, and training play a significant role in risk assessment. Older divers and those with pre-existing medical conditions are at a higher risk of fatal incidents, which is a key consideration for insurers.13 Insurance policies for dive companies typically have high limits of liability to cover the potentially massive payouts associated with a wrongful death claim. However, some insurance, like that offered by the Divers Alert Network (DAN), is specifically for recreational divers and does not cover commercial diving activities.14

When a commercial diver dies on the job, the financial repercussions for a dive company are severe and often include significant legal settlements. While specific averages are difficult to pinpoint due to the private nature of many settlements, publicly reported cases and legal firm announcements provide a clear picture of the substantial sums involved.

The Complexities of Wrongful Death Payouts

Commercial diver fatalities often fall under a specific area of law known as maritime law, which includes the Jones Act and the Death on the High Seas Act (DOHSA). These acts, rather than standard state-level wrongful death laws, govern the compensation available to a diver’s family. The amount of a settlement is determined by a variety of factors:

• The Deceased Diver’s Financials: A diver’s age, income, and future earning potential are key to calculating economic damages. Younger divers with high salaries and a long career ahead of them will typically result in a larger payout.
• The Degree of Negligence: Payouts are significantly higher when a company is found to be negligent, reckless, or in violation of safety standards. This can include failure to properly train divers, provide safe equipment, or follow established safety protocols.
• The Number of Dependents: The number of surviving family members, such as a spouse or children, and their financial dependence on the deceased diver, also heavily influence the final settlement amount.

Reported Settlements & Payout Examples

While a comprehensive “average” payout is elusive, a review of case results from law firms specializing in maritime accidents reveals the following examples of settlements and verdicts for commercial divers:

• A $4.25 Million Settlement: A prominent law firm announced a global settlement of $4.25 million in a wrongful death dive case involving multiple defendants. The details were kept confidential, but the figure highlights the significant liability faced by companies in these cases.
• A $6 Million Settlement: A commercial diver died during an excursion when his dive buddy and dive master abandoned him. While the case was initially contested on jurisdiction, it was settled for $6 million after it was discovered the dive operator was based in the United States.
• A $12 Million Settlement: Another case reported involved a father and son who suffered severe head injuries after being struck by a dive boat’s propellers, leading to a $12 million settlement. While not a death case, it illustrates the high cost of serious injury claims in this field.

In a confidential settlement, a commercial diver’s family reached an agreement with a major power company after their son was tragically killed when he was sucked into a high-pressure pipe at a hydroelectric dam. The power company had violated its own safety procedures, a factor that likely led to the successful resolution of the lawsuit.

These figures underscore that the cost of a commercial diver’s death to a dive company and its insurers is not a fixed number but a legal and financial liability that can easily reach into the millions of dollars. The payouts are a direct reflection of the economic and non-economic losses suffered by the victim’s family, as well as the level of fault and negligence attributed to the company. The prospect of such large settlements serves as a strong financial incentive for companies to prioritize and invest in the highest possible safety standards.

While high-profile, multi-million dollar settlements for commercial diver deaths often make headlines, it’s important to understand that not all payouts are in that range. The lowest payouts are typically the result of specific circumstances that limit a company’s liability or reduce the financial damages to the deceased diver’s family.

Factors Leading to Lower Payouts

Several key factors can lead to a lower settlement or jury verdict in a commercial diver wrongful death case:

• Contributory Negligence: This is perhaps the most significant factor. If the deceased diver is found to be partially at fault for the accident, their family’s compensation will be reduced proportionally. For example, if a diver’s family wins a verdict for $1 million but the diver is found to be 50% responsible for the accident (e.g., by not following a specific safety protocol), the final payout would be reduced to $500,000. In some states, if the deceased is found to be more than 50% at fault, their family may not be able to recover any damages at all.
• Worker Classification: The legal status of the diver is crucial. If the diver is an independent contractor rather than an employee, the company’s liability may be significantly reduced. Independent contractors are often not covered by the protections of the Jones Act or the Longshore and Harbor Workers’ Compensation Act (LHWCA), which are designed to provide comprehensive compensation for seamen and harbor workers. This can relegate the family’s claim to standard workers’ compensation, which typically offers much lower, capped benefits.
• Nature of the Incident: If an accident is not due to a company’s negligence or is a result of a freak, unavoidable event, the settlement will be lower. While a company is still generally obligated to provide a safe working environment, the lack of provable negligence on their part limits the family’s ability to claim for pain, suffering, and punitive damages.

Examples of Lower Payouts

Legal and insurance data, though often private, shows that lower-end settlements and awards for workplace fatalities can range from $100,000 to $300,000. While specific commercial diving examples in this range are not commonly publicized, similar outcomes can occur in other high-risk professions.

• A settlement may be in the lower hundreds of thousands if the diver was an older individual or a part-time worker with few dependents.
• If the case is settled early to avoid a protracted and expensive legal battle, the settlement amount may be lower than a potential jury verdict. This can happen when a company admits a degree of fault but a diver’s family wants a swift resolution.
• In some cases, the payout is limited to the bare minimum required by workers’ compensation laws, especially if a company successfully argues that its negligence did not contribute to the accident.

Ultimately, while the potential for multi-million dollar payouts exists in commercial diving fatalities, the actual amount is highly dependent on the specifics of the case. Factors like the deceased’s age and income, the degree of company negligence, and the legal status of the diver can all combine to result in a significantly lower settlement amount.

Insurance companies, especially those specializing in high-risk professions, use a sophisticated system to calculate the risk associated with commercial diving. This process, known as underwriting, goes far beyond a simple assessment of a single diver. It involves a comprehensive analysis of the company’s operations, the individual diver’s profile, and the specific nature of the work being performed.

Here are the key factors and data points insurance companies use to calculate risk for commercial diving:

1. Actuarial Data and Industry Statistics

Insurance companies rely heavily on actuarial data—the statistical analysis of risk—to set their premiums. For commercial diving, this data includes:

• Fatality Rates: As mentioned, commercial diving has one of the highest fatality rates of any profession. Insurers look at data from organizations like the Centers for Disease Control and Prevention (CDC) and the Bureau of Labor Statistics (BLS) to understand the frequency of fatal accidents in the industry.
• Injury and Illness Rates: Beyond death, insurers track non-fatal but serious incidents, such as decompression sickness (the bends), gas embolisms, and injuries from equipment failure or entanglement. The frequency and cost of these claims directly impact premium calculations.1
• Causes of Accidents: Underwriters analyze the root causes of accidents to identify the most common risks. This helps them understand which safety measures are most effective and which operational practices are the riskiest.

2. Company-Specific Risk Profile

An insurance company doesn’t just assess the general industry risk; it evaluates the specific company seeking coverage. This includes:

• Safety Protocols and Training: A company with a strong safety record, comprehensive training programs, and a dedicated safety officer will receive a better risk rating than a company with a history of safety violations. Insurers may look for adherence to industry standards set by organizations like the Association of Diving Contractors International (ADCI).2
• Equipment Maintenance: The quality and maintenance of a company’s diving equipment, including life support systems, communications, and emergency gear, are a primary risk factor. Insurers want to see a rigorous maintenance schedule and proof of regular equipment checks.
• Past Claims History: A company’s history of past claims, including the number of incidents and the size of the payouts, is a powerful predictor of future risk. A poor claims history will almost always result in higher premiums or even a denial of coverage.

3. Individual Diver Profile

Each commercial diver is also assessed as an individual risk. Factors considered include:

• Experience and Certification: A diver’s level of experience and the type of certifications they hold (e.g., ADCI or DCBC certifications) are critical.3 An experienced diver with advanced training is considered a lower risk than a new or uncertified diver.
• Health and Medical History: Divers must undergo rigorous medical exams to ensure they are fit for duty. Insurers will review medical history for conditions that could be exacerbated by diving, such as heart conditions, respiratory issues, or a history of substance abuse.4
• Specialized Skills: A diver’s specific skillset also plays a role. An underwater welder, for example, is exposed to more hazards than a diver conducting visual inspections, and this is reflected in the risk calculation.

4. Nature of the Dive Operations

The specific work a company performs is a major factor in risk assessment. Underwriters look at:

• Depth and Water Type: Deep-water offshore oil and gas diving is considered higher risk than shallow-water inland diving (e.g., in a lake or river). Dives in cold water, strong currents, or zero visibility conditions also increase the risk profile.5
• Hazardous Environments: Diving in contaminated environments, such as sewers or nuclear power plant cooling ponds, carries unique risks, including exposure to hazardous substances.
• Type of Work: The type of work being performed is a key determinant of risk.6 Examples, in increasing order of risk, include:
  • Scientific and Survey Diving: Generally considered lower risk.
  • Inspection and Maintenance: Involves more hands-on work with potential for equipment-related accidents.7
  • Demolition and Salvage: Involves working with heavy machinery, explosives, and unstable structures.
  • Underwater Welding: A high-risk specialty that combines the dangers of diving with the hazards of welding, including electrocution and burns.

By combining these different layers of data, insurance companies can create a detailed risk profile for each commercial diving operation and set premiums that accurately reflect the potential for a catastrophic loss.

It must be noted that there have been many times that the premiums did not reflect the catastrophic loss of a diver’s life and pennies on the dollar were paid out. (This is subject for another article.)

References (1-14):  Humandiver.com, ADC-int.org, riskquoter.com, wecovr.com, tdi.texas.com, sports-fs.com, biscaynerisk.com / NCBI, Divers Alert Network, EM&I, Kraft Davies Olsson PLLC, CDC