Offshore Employers Liability: Remedies, Liabilities, Indemnities and Insurance Solutions
Authors: Bice W. Robins 
Published: October 2008

Scope

Offshore employment of professional and non-professional workers creates various employer's liability exposures, which are frequently different from those applicable to the same employee in wholly shoreside employment.1 This paper attempts to provide information useful for the anticipation of these exposures and for the provision of protection from these liabilities. The most common protections are insurance provided by the employer, insurance provided by third parties, and indemnity contracts. Indemnity contracts are also a frequent source of employer's liability, because other entities in the offshore work environment frequently include employee indemnity provisions in their contracts for offshore work. Alternative strategies such as self-insured retentions, stop-loss, excess and umbrella insurance programs, or risk financing concepts are beyond the scope of this presentation.

Introduction

The types of offshore employer's liability most frequently encountered include Longshore Act and/or state worker's compensation act statutory claims, Jones Act seamen's claims, and third-party type exposures returned to the employer by indemnity contracts.2 The most important indicators of which type of employer's liability exposure is presented by a given offshore assignment are location, vessel involvement, type of employment, and relevant contracts, if any. It is necessary to choose whether to present first the types of liability to which offshore employers are exposed, or to organize the paper round the jurisdictional indicators which invoke those liabilities. This presentation will focus on the indicators which dictate the issues an employer will face when workers are sent offshore. A summary of the several liability regimes or systems is also included, once the issue-determining indicators have been identified.

Location

The first key to analyzing the location of any offshore job is the thoroughness which is necessary in listing the possible places where the job may take employees. It is sometimes useful to visualize an employee's seaward progression from downtown office to the waterfront or heliport, and then to each of several possible maritime locations. Does the employee have any shoreside duties or place of employment? In which state or states do they occur, for purposes of state worker's compensation act coverages? In the interest of thoroughness, bear in mind that an employee may sometimes be found to be in the course and scope of his employment during mobilization or travel to an offshore embarkation point, whether boat dock or heliport.3 Certainly during the specialized transportation inherent in reaching the offshore workplace, whether provided directly by the employer or by the employer's customer, or by a subcontractor to either the employer or its customer, the employee will be within the course and scope of his employment.4 A Jones Act seaman will retain his seaman's status during the helicopter ride from vessel to shore, 5 even though the pilot in the seat next to him will have a worker's compensation remedy which may vary according to where an accident happens.6 Where was the employee recruited, and where does the employee reside?7 These facts are usually available in personnel files, and can be relevant to the extraterritorial coverages of some state workers' compensation statutes. Some states may permit choice of law clauses in employment contracts.8