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Originally Posted by 70ToppsFanatic
On the subject of the guarantee everyone so far is making an assumption that PSA would have to pay for these out of “reserves”. However, there is another possibility.
Most service businesses carry Errors & Omissions liability insurance, as well as quite a few addition liability coverages. If a TPG carries E&O coverage it would certainly be to cover extraordinary guarantee costs beyond a reasonable deductible level that the TPG would have to pay first.
While their future premiums could be increased dramatically as a result of this, I doubt very much that a large number of guarantee claims resulting from this situation would dent a TPG too badly in terms of depleting their reserves.
And besides, in this case there is a patsy named Brent who is basically going to take the brunt of it all. The TPG records are almost certainly sufficient to be used as the basis for going after Brent criminally if he doesn’t do exactly what the TPGs he brought into harms way want him to do.
More than likely almost none of the stink of this falls back on the TPGs if they intelligently leverage what they have to hold over Brent’s head.
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My gut reaction is that of all the misgraded PSA vintage cards, the great majority have nothing to do with PWCC. So perhaps for those that do involve PWCC, they will try to pin it on them. But it is my view that represents only the tip of the iceberg of PSA's potential exposure.
As to insurance coverage, that is not my area of expertise, except to say that the experiences I have had (in the real estate business) tell me that where there is potentially a lot of money on the line, carriers will look for any way out. And in this instance, I suspect they will take a long hard look at the voluminous numbers of high-grade vintage cards emanating from PSA. People for years have been opining that the sheer number is at variance with common sense, as well as reported observations from an earlier era. So this raises the issue to me of incompetence on the part of the insured which possibly could void coverage. Will an insurance company attempt to use that as a basis to deny coverage? Again, not my area of expertise but based on the limited experiences I have had, I would not be surprised to see that happen.
Also, even if such coverage does come into play, how much could it potentially cover? $1 million, $2 million, I have no idea. But I would not be surprised if whatever the limit is, it is far too little if a significant percentage of altered cards were to be returned to PSA.