U.S.DepartmentofLabor 

June 19, 1998 

Employment Standards Administration 

ONice of Workers' Compensation Programs 

Division of Longshore and 

Harbor Workers' Compensation 

Washington, D.C. 20210 

Notice No. 87 

NOTICE TO INSURANCE CARRIERS, SELF-INSURED EMPLOYERS UNDER 

THE LONGSHORE AND HARBOR WORKERS' COl\fPENSATION ACT, AND 

OTHER INTERESTED PERSONS 

SUBJECT: Insurance Requirements under the Longshore Act 

Section 32 of the Longshore Act, 33 U.S.C. §§ 901-949, requires covered employers 

to secure the payment of benefits under the Act by insuring with a company that is 

authorized by the U.S. Department of Labor. " 

Section 2(4) of the Act defines the term covered "employer" as 

an employer any of whose employees are employed in maritime 

employment, in whole or in part, upon the navigable waters of the 

United States (including any adjoining pier, wharf, dry dock, terminal, 

building way, marine railway, or other adjoining area customarily 

used by an employer in loading, unloading, repairing, or building a 

vessel). 

Section 2(3) of the Act defines the term "employee" as 

any person engaged in maritime employment, including any 

longshoreman or other person engaged in longshoring operations, and 

any harbor-worker including a ship repairman, shipbuilder, and shipbreaker .... 

The Act provides for serious legal consequences in the event an employer fails to 

carry proper insurance coverage. Section 38(a) states, in relevant part, that 

[a]ny employer required to secure the payment of compensation under 

this Act who fails to secure such compensation shall be guilty of a 

misdemeanor and, upon conviction thereof, shall be punished by a fine 

of not more than $10,000, or by imprisonment for not more than one 

year, or by both such fine and imprisonment; and in any case where 

such employer is a corporation, the President, Secretary, and 

Treasurer thereof shall be also severally liable to such fine or 

imprisonment as herein provided for the failure of such corporation to 

secure the payment of compensation; and such President, Secretary, 

and Treasurer shall be severally personally liable, jointly with such 

corporation for any compensation or other benefit which may accrue 

under the said Act in respect to any injury which may occur to any 

employee of such corporation .... 

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An uninsured employer may also be subject to civil suit by an injured employee or 

his legal representative pursuant to § 5 of the Act. Section 5(a) of the Act provides, 

in relevant part, that 

[i]f an employer fails to secure payment of compensation as required by 

this Act, an injured employee, or his legal representative in case death 

results from the injury, may elect to claim compensation under the Act, 

or to maintain an action at law or in admiralty for damages on account 

of such injury or death. In such action the defendant may not plead as 

a defense that the injury was caused by the negligence of a fellow 

servant, or that the employee assumed risk of his employment, or that 

the injury was due to the contributory negligence of the employee." 

Section 38(b) of the Act states 

[a]ny employer who knowingly transfers, sells, encumbers, assigns, or 

in any manner disposes of, conceals, secretes, or destroys any property 

belonging to such employer, after one of his employees has been 

injured within the purview of this Act, and with intent to avoid the 

payment of compensation under this Act to such employee or his 

dependents, shall be guilty of a misdemeanor and, upon conviction 

thereof, shall be punished by a fine of not more than $10,000, or by 

imprisonment for not more than one year, or by both such fine and 

imprisonment; and in any case where such employer is a corporation, 

the president, secretary, and treasurer thereof shall be also severally 

liable to such penalty or imprisonment as well as jointly liable with 

such corporation for such fine. 

This would apply to any covered employer which is uninsured and closes its 

business with the intent to avoid paying the benefits required by the Act. 

If an employer wishes to avoid the risk of the penalties contained in § 38(a) of the 

Act, as well as the loss of the limited liability protection afforded by § 5(a), it must 

obtain insurance coverage in accordance with § 32 of the Act. 

If anyone is aware of an employer who is operating without appropriate insurance 

please write to the following address: 

U.S. Department of Labor 

ESA/O\VCP/DLHWC, Room C-4315 

200 Constitution Avenue, NW 

Washington, D.C. 20210 

, bore and 

Workers' Compensation