The Hazards and Rewards of Whistleblowing

Although whistleblowers can be significantly rewarded, doing so for the sake of personal gain is a poor ethical motivation.

October 22, 2013 Photo

My great-great-great-great grandmother killed an unarmed man while his back was turned.

As the family record tells it, Ann Morris Maddy became a widow after her husband, a Revolutionary War veteran, drowned in the Shenandoah River in 1783. She was left to care for 10 children. While settling the estate of her husband, she had to travel alone by horseback through the West Virginia mountains. After transacting some business, she had a considerable amount of money in her clothing—a fact that was guessed upon by an opportunistic local settler. Under the pretense of showing her a shortcut, the settler brought my ancestor to a remote area on the edge of a cliff. As it says in the family book:

She accepted his kind offer and coming to a lonely place over a ravine, he told her he knew she had money, that he intended to have it, and that he would throw her over the cliff and no one would be the wiser. She descended from her horse, as if accepting her fate and asked that he turn his back as the money was in her clothing. Probably she had a more complicated job to get it than she would today. He obligingly turned away, and she made a dash at him, threw him off his balance and over the cliff and resumed her journey, unmolested. (Us Maddys, revised by John K. Maddy, 1985, p.71.)

The circumstances of an event can wholly change the ethical character of an action. Even though my ancestor killed an unarmed man, most people who hear this story don’t find fault. The self-defense of a recently widowed, threatened, unarmed, unescorted woman in an unfamiliar place (with 10 mouths to feed) would likely have even a confirmed pacifist give pause before leveling any criticism.

As most tend to think there is such a thing as “justifiable homicide,” even more would conclude that there are many times when disclosure of information is the higher moral ground. While someone who disseminates hidden knowledge can be known derisively as a gossip, tattletale, or snitch, the term “whistleblower” is reserved for those who reveal secrets for good reasons. Motive is central to the heart of whistleblowing. Ideally, the whistleblower seeks to right wrongs, protect fellow employees or citizens, and expose greed and dishonesty. In short, whistleblowers are invaluable for keeping corporations and the government honest.

The U.S. Office of Special Counsel provides a good list of some of the most common reasons for whistleblowing:

  • A violation of any law, rule, or regulation
  • Gross mismanagement
  • A gross waste of funds
  • An abuse of authority
  • A substantial and specific danger to public health
  • A substantial and specific danger to public safety.

The theme here is fairly clear. Whistleblowers are not to be exposing the peccadillo or the minor infraction. It is gross, major, and substantial problems that are the purview of whistleblowing. At its best, whistleblowing is not even about a citizen defending his own legitimate rights. Rather, its focus is the public good.

Although whistleblowers can be significantly rewarded at times, whistleblowing for the sake of personal gain is of course a poor ethical motivation. Moreover, it may be an ill-advised motivation in general; negative and positive consequences are common. It is no secret that whistleblowing often requires a good deal of courage, and that those reporting the misdeeds of businesses can be the subject of retaliation and retribution.

As the road is difficult and the legal matters complicated, it is best to do your homework and carefully weigh your options. Legal advice is a must before choosing any course of action. As leading whistleblowing attorney and executive director of the National Whistleblower’s Center Stephen Kohn remarks in The Whistleblower’s Handbook, the web of federal and state laws is much too complicated to assume any particular level of either risk or protection: “Fifty different federal whistleblowing laws mean that there are more than 50 unique definitions of protected activity, 50 statutes of limitation, and 50 separate procedures for filing claims.”

The CPCU Code of Professional Conduct provides a good framework for this general discussion. In Canon 1 of the code, it states that “insurance professionals should endeavor to place the public interest above their own.” Although not all insurance professionals are bound by the code, concern for others is a bedrock point of ethical behavior and a principal motivation for adjusters who seek to find a higher meaning and significance in their profession. As the insurance mechanism supports the public good, likewise well-directed whistleblowers can assist in strengthening the ethical foundations of the insurance industry and help ensure that the adjuster’s career continues to be about more than just drawing a paycheck.  


The opinions expressed in this column are those of the author and do not necessarily reflect the views of the CPCU Society membership, the CPCU Society Ethics Committee, or the author’s employer.


*Image courtesy of

About The Authors
Barrett A. Evans

Barrett A. Evans, CPCU, AIC, is a regional claims manager for County Reinsurance, Ltd. He is a member of the CPCU Ethics Committee and has been a CLM Fellow since 2012.  

Sponsored Content
Daily Claims News
  Powered by Claims Pages
Community Events
  Claims Management
No community events