Source: http://www.longshoremaninsurance.com/faq.html
Timestamp: 2019-04-21 16:23:45+00:00

Document:
A question we get quite often, after we discuss the Longshoreman or USLH account, is “why do we need Marine General Liability when we already have General Liability Insurance?
general practitioner perform heart surgery? Of course not!
When this client came to us they had been trying to do something for 2 weeks and kept getting the same answer. We spent one week and got some answers and tentative rates for this prospective client. “Yes, we can do that” is part of our innate mindset. We quoted the longshoreman insurance, the State Act workers compensation and the Marine Employers Liability with some “subject to” or “indication” of what the rate will be. Most importantly we let the client know that “Yes We Can” is part of what we do.
Longshoreman Insurance. Can you help us?
contractor who is new to the marine construction or construction field.
contractors were faced with having to pay $15,000 premium up front just for the USL&H or Longshoreman Insurance.
With proper guidance a USL&H policy can be found to get the small or large marine contractor an entry into the marine insurance world that doesn't require a mortgage! LongshoremanInsurance.com can be reached at rh@longshoremaninsruance.com or by texting or calling their main number at 205-221-5466.
with marine insurance on a daily basis.
Our marine contracting company just got a new contract and we need to apply for Longshoreman Insurance. We are trying to get our information together. What questions will a marine underwriter be asking so that we can be prepared to answer them?
1. Do you provide proper training and supervision to employees working on/around heavy equipment?
2. Is respiratory, hearing and eye personal protection equipment (PPE) provided?
3. Are machine operators certified?
4. Is equipment certified on a regular basis?
5. Are there any heavy or bulky items lifted manually? Whatis the maximum lbs an employee may be lifting?
subcontractors under Longshoreman Insurance, NONE!
II. The one who is insured by you.
State Workers Compensation “Rules of Independent Subcontractors” go “out the window” here and the pass up is 100% clear and long reaching. Longshoreman Insurance is governed by the rules of the Federal US Department of Insurance while the State Workers Compensation Insurance policies are governed by the rules of each individual state. Both State Act Workers Compensation Insurance and USL&H or Longshoreman Insurance are required in most marine jobs. Additionally, there are no “Corporate Officer Exclusion” in USL&H or Longshoreman Insurance as there are in the State Workers Compensation Policy. Both the General Contractor and the Subcontractors are governed by the two sets of rules, Federal USL&H and State Act Workers Compensation. What is worse for any uninsured subcontractors, is that the General Contractor, or company who hires them, could themselves be EXEMPT from Longshoreman Insurance. However, by hiring an uninsured subcontractor, it brings them back into the Longshoreman Insurance venue. Two classic examples of this are Government employees and Marina employees - both of which are exempt from USL&H Insurance in most cases.
Let us say, for example, the marina hires a subcontractor to build a new dock for them (a clear Longshoreman type job), but the subcontractor does not carry Longshoreman Insurance. The marina itself becomes liable for unpaid benefits but typically will themselves be uninsured for Longshoreman Insurance, as they are exempt and thus suffer all the monetary penalties and possible jail time.
The same is true for the Government who subcontracts stevedoring work to an uninsured employer.
Remember, it is ALWAYS best to employ a MARINE INSURANCE PROFESSIONAL because unless your broker or agent deals with longshoreman insurance or marine insurance on a daily basis, then they have no idea how to properly insurance a marine type risk. You will be left with no insurance and having to sue the agent who will have to rely on his or her Errors and Omissions Insurance. In the meantime, you will have a large problem!
Email us with rh@longshoremaninsurance.com for questions or our office hours are from 9AM-4PM CST M-F.
Phone 205-221-5466 during office hours or 205-275-5005 after hours.
new 3 year contract going forward with a reduction of rate of around 14%. Our concern is that we would be locked into a new 3 year contract at this rate (which is a good rate). We expect to increase our payroll by a couple of million dollars over the coming years. We would like the option to shop our Longshoreman Insurance coverage next year. However, we would like to still get the 14% rate reduction. What should we do?
Answer: Most reputable insurance companies would most likely want to keep your business and to keep you happy.
Our bet is that even after one year into the new 3 year contract you would be able to ask for rate relief if you meet 2 conditions: 1) Increased payroll, which means increased income to the insurance company; and 2) good loss experience.
the USL&H Act? Is there an endorsement called P&I?
and passengers between United States ports is limited to US built and US flagged vessels.
Concerning General Liability coverages, the requirement to have USL&H coverage CANNOT be included under ANY general liability coverage!
"What is P&I?" P & I refers to Protection and Indemnity. P&I is a mutual maritime insurance provide by a P&I Club typically a Club sponsored by one of the Lloyds of London Maritime entities. P&I is used to cover the vessel hull, other vessel risks, and also the crew. Crew coverages are for Injury, Illness, Loss of Life, Hospital, Medical and other expenses.
with the cruise line industry? And what would be the cost of the insurance?
Act Coverage (USLH) and Maritime Coverage Endorsement with no territorial limits or worldwide.
contractor's employees and/or its sub-contractor.
c. Such insurance shall name (main party such as the cruise lines) as additional insured and with a waiver of subrogation.
The cost of the insurance will depend on the actual payroll and the number of workers that will be employed. For a one man operation, the minimum premium will be $10,000 and this will probably be the minimum earned amount which means that all the premium will be earned from the "git-go" and has to be paid up front with no payment plan.
workers compensation. Businesses that have more than $10,000 in premium over the last two years qualify for an Experience Modification Factor. This is sometimes called an "X-mod" or Experience Mod. These modifications factors are computed by the NCCI or the National Council on Compensation Insurance located in Boca Raton, Florida. This factor allows the industry to charge more for companies that have more claims and to charge less for companies that have fewer claims. This gives the employer the opportunity to manage its own costs. For example, a company with a .75 mod factors with a premium of $100,000 will have a modified premium of $75,000 while a company with a premium of $100,000 and a mod factor of 1.25 will pay a modified premium of $125,000! Unlike most other insurance coverages, workers compensation and Longshoreman Insurance is the one insurance premium that can be controlled by the employer.
We are a PEO/staffing company and most of our clients do not need USL&H.
We can write the clients who need the Longshoreman Insurance. However, the company’s annual payroll will need to be in the $75,000 to $100,000 range at a minimum in order for us to quote it.
Concerning your second question, yes, you are correct. Your client will need general liability (GL) and or have the GL policy endorsed to cover marine also. Without this endorsement you client runs the risk of having an uncovered loss.
Call us at 205-221-5466 and we can discuss risk solutions for you.
less than $10,000 to $15,000?
Whether you are a staffing company or a pure marine contracting company, it doesn't matter. We have options for you.
cases we can help you get going and not have to make a large payment until 30 days after the inception of your policy. This will give you time to get some monies coming back in your direction before making a huge capital outlay of funds. We are very experienced in doing various things depending on the situation.
Again, each company situation is different one from the other. We can be reached at 205-221-5466 to discuss your options on how to get this going. Also, for the larger companies that are already paying large premiums of say $75,000 to $100,000 per month, we need to have a conversation about options to reduce your premium outlay and to increase your net profit. We are more than just a marine brokerage house. We offer solutions to your many questions. Let's have a conversation. After hours, we can be reached at 205-275-5005.
Question: What Is MEL (Maritime Employers Liability)?
Maritime Employers Liability (MEL) was first written more than fifty years ago and is widely available in the market today, it remains one of the most mysterious of marine coverages-- falling somewhere between Ocean Marine Lines and Workers’ Compensation. What is MEL? MEL is coverage for an employer’s liability to its employees that would fall under Admiralty Law, roughly equivalent to Workers’ Compensation when someone is on a vessel. It can include Jones Act as well as General Maritime Law remedies including Maintenance & Cure, Unseaworthiness and Death on the High Seas Act.
MEL is NOT a compensation policy and does not cover any benefits available under Workers’ Compensation, Longshore & Harbor Workers Compensation Act, Outer Continental Shelf Lands Act or any other state or federal workers’ compensation system. Most MEL policies contain specific exclusions for all those, but some older policies did not contain these exclusions and are specifically endorsed to add them. Confused yet? In addition, MEL is not a replacement for a Protection and Indemnity (P&I) policy. A P&I policy offers not only coverage for employees, but also a large amount of third party bodily injury and property damage liability coverage not found in the MEL policy. Further, most MEL policies exclude the true “crew” of an employer on owned vessels. Those are the people specifically covered by most P&I policies. MEL is one of the most critical parts of many marine insurance programs and, if properly understood and placed, can provide essential coverage.
Are there any exclusions to the Longshoreman Act?
are not engaged in work normally performed by employees of that employer under this ACT.
Are you familiar with the "Traveling Workmen Clause?"
This coverage is NOT site specific. It is good to have this coverage and sometimes can be obtained at no extra cost.
Are you familiar with the "DISCOVERY PERIOD" on your Marine General Liability Policy?
expiration. This can be a very bad clause to have in your policy. Have your agent negotiate to remove this clause from your policy or at least extend the discovery period to up to 60 months.
Q: What about when I work on recreational vessels? Is that subject to the USL&H Act?
A: The answer is, "It depends!"
The USL&H Act 902 does exclude the following: "individuals employed to build any recreational vessel under sixty-five feet in length, or individuals employed to repair any recreational vessel, or to dismantle any part of a recreational vessel in connection with the repair of such vessel..."
However, the Longshoreman Insurance Act includes individuals building recreational vessels 65' or longer or dismantling a recreational vessel when it is not in connection with the repair of that vessel.
And Work, such as repair or installation of equipment, on recreational vessels may be subject to the Longshoreman Insurance Act if the vessel is chartered with a skipper or crew on "more than an infrequent basis" or chartered as a bareboat with more than 12 passengers.
Q: I keep hearing about a "VENDOR" exclusion to the Longshoreman Insurance Act. What is the “vendor” exclusion stated in Subsection 902(3)(D) of the USL&H Act?
2) is not engaged in work normally performed by employees of that maritime business; and (3) is covered by a state’s workers’ compensation program.
Do I REALLY NEED LONGSHOREMAN Insurance?
The following is a good article that takes one step-by-step through the process of 'Do I really need USL&H?
"I have a worker going to Europe working aboard a ship. Will my MEL coverage cover him in Europe?"
The MEL coverage will not cover the worker in Europe once he steps off the ship. MEL only covers the worker while the ship is in navigation. An international coverage is required and is very affordable.
"What is the definitive source of all my questions on Marine Insurance and Longshoreman Insurance.?"
The definitive source is the US Dept. of Labor.
Also see this Blog on Marine and Longshoreman Insurance.
"I have a young company and would like to know what are my limits for 1099's who can operate under my umbrella and still be covered by all of my policies. I know you mentioned it is a certain percentage of payroll? I appreciate the clarification. I am in the process of adding another gentleman to my team...."
I.Your rates on Liability and Marine General Liability are based on your gross sales....no limits. You just pay according to how much business you do.
II. Same goes with State Act Workers Compensation (except the rates are based on Payroll) and for USLH (Longshoreman Insurance). You pay WC and USLH based on rates per $100 payroll. There are no limits other than your ability to pay.
III. Caution is urged in that you will be hit with a potentially huge audit billing if you do not notify the insurance companies as you move along growing your business of your increase and gross sales and payroll and have them adjust your sales for liability and payroll for WC and USLH.
"My workers that are insured with your company are leaving today headed to the UK. We will continue doing the same time work and the category or work that we are contracted to do has not changed. I have added new workers and I need to make sure that they are covered under my Longshoreman Insurance (USLH) and under my Marine General Liability Insurance and other coverages. Do you need the new worker's names for them to have coverage?"
"No, we do not need your new worker's names at this time. Your company payroll will be included under your Longshoreman Insurance and under your General Liability sales and we do not need individual names. He will be covered automatically. Have a good trip!"
"Lately, has the USDOL (US Dept of Labor) increased or changed the penalties relating to ocean marine insurance and the requirements?"
The U.S. Department of Labor has recently (2015) increased penalties and fines against marine employers and insurance carriers. Specifically, employers/carriers who fail to report first injuries or final payments are now facing an increased fine. Further, employers now face an increased penalty for discrimination.
Failure to file first report of injury or filing a false statement or misrepresentation in first report.
Increase from the current maximum of $11,000 to $22,587.
Increase from the current $110 to $275.
Discrimination against employees who claim compensation or testify in a LHWCA proceeding.
Increase from the current minimum of $1,100 to a minimum of $2,259, and increase from the current maximum of $5,500 to a maximum of $11,293."
How do I know if I need USL&H or Longshoreman Insurance?
What happens if my company is supposed to have Longshoreman insurance and does not have it?
Today we received this question from a prospective client. The client usually doesn't do much "marine type work." However, they have been asked to bid on a couple of jobs that do require Longshoreman Insurance or USL&H.
"Can you tell me how the Longshoreman Insurance works? Does it work instead of our W/C and Liability Insurance we have with our insurance carrier? Or is it in addition to this insurance? What types of accidents does it cover? Drowning, etc.?"
Longshoreman Insurance is very similar to "State Act Worker's Compensation" in that the premium is based on a per $100 of payroll and class of work to be performed. Longshoreman Insurance provides benefits and pays claims for your workers injuries or potential injuries. Whereas general liability insurance pays for injuries to anyone other than your workers. The cost of Longshoreman Insurance is more than the regular "State Act Worker's Compensation" so one wants to maintain very good payroll records being careful to delineate who is working on what job. Is it a "marine" job or is a "regular" job? The coverage for Longshoreman insurance is very similar to "State Act Workers Compensation" in that it pays for medical bills, hospital stays, disability, time off work and most expenses related to any injury. However, the amount of recoverable monies from an USL&H incident or accident is much greater than that of the regular State Act Workers Compensation.
This question came to us today. "Other than Longshoreman Insurance or USL&H Insurance, what other types of insurance will we need in order to work aboard a ship doing underwater mapping of the ocean floor?" "We will be joining a crew to analyze their data in order to do ocean floor mining." What is the estimated cost?
The cost of all these coverages on an annual basis will be expensive depending on the payroll and the gross income of the operations to be performed. All policies are written on an annual basis. The USL&H policy minimum premium will be $15,000 with no payment plan. The other coverages will have a payment plan available with at least 25% down payment and the balance over 8 to 9 payments.
Not all operations will require all the above coverages. Some will only want the USL&H and the liability coverages plus the State Act Workers Compensation coverages.
More specific information can be had with a consultation.
Has the applicant had any claims that were paid under USL&H?
If your workers are lifting heavy things, the company will ask: 1) Are employees provided with and required to wear safety belts for lifting heavy loads, eyewear to avoid eye injuries??
What will be the maximum height they are working on for this job? Are they required to wear proper fall equipment?
Will any of the “over water” duties be done from a vessel? If so, they may have Jones Act exposure and we’ll need to also write an MEL policy – application attached.
Do you have "emod worksheet?" This is the companies "experience modification factor."
If normal operations of a company is something that an insurance company usually does not like to write such as risks or companies working with insulation, abatement etc…. the policy quote would include a Job Limitation Endorsement. This would mean that USL&H coverage would extend ONLY to insured operations while doing certain operations in certains areas. Any other USL&H jobs during the policy term would be added - SUBJECT TO PRIOR UNDERWRITING REVIEW AND APPROVAL.
Is there a problem or do I need to have USLH coverage for my employees who work in foreign ports around the world?
The longshore and Harbor Workers' Compensation Act (LHWCA) provides benefits to "any person engages in operations of longshore, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker...".
The above defined persona have status under the Act which means as long as they are injured in a covered location (situs), the should be covered by USL&H and receive the appropriate benefits for their injury. "Situs," as defined in the USL&H ACT stipulates that the disability or death must occur "upon navigable waters of the United States."
So, if the US citizen ship repairman is sent to a foreign port to work on a US owned vessel, for its United States based employer, and is injured while in the foreign port, is the repairman covered under the USL&H Act?
The "navigable waters of the United States" is NOT defined in the Act itself, and over time numerous cases have arisen seeking to define the seaward extent of the navigable waters of the United States. Like a bunch of other provisions of the Act, decisions handed down by the legal system clarify the issue. The Administrative Law Judges (ALJ's), the Benefits Review Board (BRB), the federal appeals and circuit courts, and also the US Supreme Court has ruled in such cases as Cover Tankers v. United Ship and Reynolds v. Ingalls included the high seas provision in the definition of the navigable waters of the US. Then along came the decision in Weber v. Loveland and Grennan v. Crowley which found that there was coverage provided in foreign ports. Most recently the trend was reversed as the Federal Circuit Court held in Kelly v. Tracy that the Constitution and Congress of the United States has no jurisdiction in foreign waters! What confusion, huh? So the waters are a still muddy but it does seem that the trend now is that the USL&H ACT will NOT provide coverage in foreign waters.
So what is company supposed to do? How to best protect your company and your employees in the world economy that we find ourselves in? One solution could be to attach an endorsement calledForeign Voluntary WC endorsement or get an International Package of coverages including workers compensation. However, these coverages DO NOT provide for the USL&H Act. So what coverage is needed?
The only way to really cover yourself is to buy the USLH Coverage which eliminates the "navigable waters of the US" provision or is a true coverage for worldwide exposures. However, that is not so easy. That is where our experts at longshoremaninsurance.com or Old National Insurance can work with you to provide assistance and work to provide the broadest scope of coverage possible for your clients and their employees. Our phone is 844-667-6640 .
Most business owners sometimes believe that Longshoreman Insurance and workers compensation is controlled by the state or the legislature in the state where they live and that they have no control over how much it costs them. That is not the case! (Workers compensation rules are State Specific and the Longshoreman Insurance or USL&H rules are promulgated at the federal government level.) Workers compensation and Longshoreman Insurance costs is the one insurance that the business owner can control. “So how do I control my Longshoreman and workers compensation costs?” Overcharges, have you ever wondered if you are being overcharged for your Longshoreman Insurance? This is a question that you may be asking at this moment.
What causes Longshoreman and Workers Compensation Overcharges?
To follow are but a few reasons that cause confusion for the insurance company, the rule makers at NCCI and the business owners.
One reason is "Class codes." Is your insurance company applying the proper codes to the work that you are doing in your company? Another reason is improper data and record keeping by the insurance company and sometimes by the business owners. The insurance company uses complex actuarial rating formulas that are very difficult to understand at times.
Premium credits pertaining to "state act workers compendsation- Does your state offer a Merit rating on your State Act Workers Compensation? Does it offer drug credits? Or a Safety Credit? Or a Contractor Credit? If an employer doesn’t realize that a premium credit might apply, and doesn’t fill out and send in the appropriate forms, the employer won’t get the premium credit.
Is your longshoreman insurance or workers compensation policy being written in the assigned risk plan even though your company can now be written in the voluntary market with lower workers compensation rates?
One class code may be correct in one state but wrong in another state resulting in higher or lower premiums being paid.
Only an expert and one who deals with Longshoreman Insurance and its distant cousin of Workers Compensation can keep up with all the complex changes, mod factors, and classification codes being used. Business owners have a business to run and our brokerage services have found ways to save Marine business and regular businesses thousands of dollars on their Longshoreman and/or workers compensation insurance. We recently saved one business over $75,750 PER MONTH on their Longshoreman Insurance.
Since I am an owner of my company, can I exclude myself from Longshoreman Insurance like I do on my regular worker's compensation?
The answer is no. One cannot exclude themselves from coverage under the Longshore Act (USLH) like one does on the regular worker's compensation coverage.
Will my General Liability Policy (also known as a CGL or Comprehensive General Liability Policy) also cover my water related or marine insurance exposures?
The answer is "no" probably not. To Follow is some policy language.
C.G.L. Watercraft Exclusion - "Bodily Injury or Property Damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."
If I have a Workers Compensation or Longshore claim takes place how do I report the claim?
The Workers Compensation and Longshore claim must be reported directly to the carrier or insurance company involved. We furnish the details on how to do this with each binder we furnish and if you have any questions, please call us at 844-667-6640 or 205-221-5466 or after hours at 205-275-5005 and we will be more than happy to help you with your claim. Harris Insurance stands ready to help you with your Commercial Marine and Longshore business and are committed to providing you with the best markets, resources and assistance you need to run your business.
What type of business does your company insure?
Here are some of the recent business types we have insured or worked on in the past 6 months.
Are you involved with repair, dismantling and manufacture of recreational boats? If so you need to pay attention to some recent changes and regulations on the (LHWCA) Longshore Insurance requirement.
A recent 2009 change in the law is as follows: IF YOU REPAIR OR DISMANTLE A RECREATIONAL BOAT OF ANY SIZE, THIS WILL NOT CAUSE YOU TO BUY LONGSHORE INSURANCE IN MOST CASES. THERE IS STILL A "maybe" questions however. An exception to the rule is that if you are repairing a foreign flagged recreational vessel in the USA, then you fall under the exception of having to have USLH insurance. If you firm also works on non-recreational vessels then, make sure that you keep excellent records showing the payroll of non-recreational boat repair work and recreational boat repair work. This can save you thousands and thousands of dollars on your Longshoreman Insurance premiums!
Other exceptions to the USLH rule is when you work on public vessels such as police boats. Keep good payroll records on this as well. Vessels used in the military or commercial uses are NOT exempted from having to buy USLH insurance.
The US Department of Labor has a website that is very good and discussion can be found in the Federal Register.
Longshoreman and Marine Insurance definitions and questions.
What are the risks of chartering a commercial vessel?
A. What is a "Voyage Charter "?- a voyage charter is whereby the charterer is "leasing" space on the vessel (a cargo hold or tank) for one voyage only. The charterer is essentially "along for the ride" since he exercises very little operational control over the vessel.
B. What is a "Time Charter"? -a time charter is where the charter leases the vessel for a perior of time (usually a year or more). The charterer shares operational control of the vessel with the Vessel Owner, and the ship's Master answers to both parties. The sharing of control normally divides between the vessel's cargo operations (mostly under control of the charter) versus vessel operations (under the control of the Vessel Owner).
C. What is a Bareboat (Demise) charter? - this is where the charterer essentially stands in the shoes of the Owner and leases the vessel for a significant period of time. The charterer has full operational control over the vessell and bears all the expenses to operate and maintain the ship. This arrangement allows a charterer to "look like" a Vessel Owner but not carry the expense of the costly asset on his balance sheet.
In case you come across this term "Owner Pro Hac Vice," this means taking the place of another.
What is a SAMPLE INSURANCE AGREEMENT?
(ii) Repatriation, loss of personal effects and other costs to employees (including, without limitation, burial costs) in the event of death, casualty or termination of a voyage.
(c) All such insurance shall be in form, in amounts, with carriers and on terms reasonably satisfactory to SAMPLE COMPANY and shall name SAMPLE COMPANY as additional insured (with respect to General Liability Insurance). to the extent Contractor is liable under (a) above. Contractor shall provide to SAMPLE COMPANY, prior to the commencement of the term of the Agreement, Certificates of Insurance evidencing such coverage.
Once you as a contractor have the required insurance in hand give us a call at 844-667-6640 and we will work with you to understand what you must have and the costs and risks associated with the insurance. Email is rh@longshoremaninsurance.com or after hours at 205-275-5005.
"Since I am new in business, can I get Marine General Liability and Longshoreman Insurance and how much is it gonna cost me?"
Our agency insured this client just last week. His company is a welding and repair contractor on the Gulf Coast and had to have State Workers Compensation, Longshoreman (USLH) Insurance and Marine General Liability for his operations. They do not work aboard a ship but work near the dockside.We have had clients who was required to have the USL&H or Longshoreman Insurance in place even though their job site was 5 miles away from the Bay or the body of water. As he is just now getting into business, we had to search our markets to get him coverage at a price he could afford. We call and emailed over 7 of our insurance companies before we arrived at a premium amount he could afford and one that had all the necessary requirements to satisfy his contract. It took us a couple of weeks to secure his quotes and his coverages. His projected payroll is around $250,000 and his down payment for the two policies was around $16,570. He will be making monthly payments as we go along and since his payroll is an estimate only, he will be keeping a sharp eye on the payroll over the coming 3-6 months in order to see if we need to adjust the payroll during the policy periods in order to avoid having a large audit due after the end of the policy period.
I will copy and paste it below.
(a) Failure to secure payment of compensation. Any 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 while it shall so fail to secure the payment of compensation as required by section 32 of this Act [33 USC § 932].
(b) Avoiding payment of compensation. Any 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 of imprisonment as well as jointly liable with such corporation for such fine.
2. Is there a longshoreman insurance for a short job somewhere ? Not to my knowledge. All policies are issued on an annualized basis and you are looking at a minimum premium of around $15,000 to $20,000 USD per year.
We sometime suggest that the 1-2 man operation look around for a "big brother" type relationship with a larger contractor in order to come under the large contractor's USLH or Longshoreman Insurance and split the job with that company. We realize that this may be hard or even impossible. However, make sure that there is enough profit and business there for you to pay $20,000 in insurance costs for your work!
3. Does the longshoreman requirements apply for foreign Country workers too which are coming over to do a warranty repair on a boat? Yes, if the foreign workers are working in or around US waters. Also, a US Company working in other countries may fall under the USLH law even though the company is working abroad.
The outlook for 2015 appears to be very positive as it appears that more work is becoming available. With the deal reached with the San Francisco Dock Workers, everyone on the West Coast of the US should see more demand for work and more demand for USLH insurance.
Most all of our questions come from the smaller operators who "stumble" into the USHL work and want to know if they need insurance or what the minimum premiums are.
One potential client called in because he is building a recreational boat 85 feet long. He wanted to know if he needed to purchase USL&H. He thought that USL&H was a requirement of a particular State and not a federal law. The answer was "Yes, you need to purchase USL&H insurance if the recreational boat you are buying is over 65 feet in length."
This week we received a couple of questions concerning USL&H (USLH) and Jones Act coverage in international waters.
"I am going to Brazil to operate a dredge in Brazil. Do I need Longshoreman Insurance?" I answered that most likely you do not need USL&H or Longshoreman Insurance because you will be operating outside the waters of the United States of America and the first two letters of USLH is "US," meaning United States and not Brazil. However, there could conceivably be a need for USL&H in this case under certain very strict conditions.
The second question is more complicated. In this case, we have an Asian company that is recruiting non-US citizens to work on an oil platform off the Coast of Africa. The contracting company is a US Company and the company is requiring the contractor to purchase USL&H and Jones Act Coverage. However, there will be no coverage under each policy unless it somehow involved a worker doing work in US waters. BUT the company IS REQUIRED to purchase the coverage in order to bid the job....a "Catch-22" situation if I have ever seen one!
The following questions were asked this week about Longshoreman Insurance. These questions come from a California contractor who was unable to get any information from his broker because the broker was not very experienced in matters of Ocean Marine Insurance or Longshoreman Insurance.
"Our services include the sampling and measurement of liquid petroleum products in tanks, ships and barges. Normally the ships and barges are docked or in a harbor where we can take a tug out to.
My understanding is that USL&H covers employees working along the shoreline and in around the harbors. We may have a job that is coming up that will be in domestic waters (14 nautical miles) but not along the shoreline.
1. Will USL&H cover my employee who has taken a third party tug out to a clients ship to sample and measure that is say 5-10 nautical miles out?
2. If not, what is the USL&H defined shoreline?
USL&H will cover the employees working along the shoreline, as long as a vessel is docked/moored. USL&H will not cover a Master or Member of a crew, but the distinction can be tough to distinguish.
If it is moving, it should be covered by USL&H, however, since you cannot dictate where a claim is file, it needs to carry MEL, at least for defense purposes (to move the claim back to the proper jurisdiction (court). When they go out 5-10 miles, I still believe in the end they would be covered by USL&H. Typically, a person needs to spend 20-30% of their time in service to a vessel to be qualified as a Jones Act seaman. It doesn’t sound like that is the case in your situation. However, if a claim is filed for jones act benefits, it will take $20,000-$30,000 in legal fees to get it to the correct jurisdiction.
Regarding work out of US waters, 15-20 miles out, I still think this is going to be covered by USL&H. Court cases have held the insured cannot sail in and out of coverage by crossing into and out of international waters to avoid longshore coverage. Courts have stretched longshore coverage to reach the high seas when sailing directly between two ports. However, my domestic wc carriers can only offer domestic MEL. It does not extend into international waters. An international MEL policy would be needed for any coverage outside territorial waters.
Sometimes there are no clear cut answers. It pays to ask these type questions of your insurance broker. Get it in writing from your broker.
Does it matter how deep the water is? Answer: it only matters if the water is not landlocked and it can get you to the ocean or is navigable waters. There are other requirements whereby one would need USL&H or Longshoreman Insurance and be miles from the water!
What is the difference between MEL Insurance and Jones Act Coverage? What is the difference between MEL Insurance and Jones Act Coverage?
If your employees find themselves on a vessel operated by another company, Maritime Employers Liability Insurance should be a consideration.
Once a vessel has left the dock and is under its own power, state Workers' Compensation does not cover you and USL&H coverage will not be enough to cover your employees.
Employers that should consider Maritime Employers Liability Insurance if your company is involved with supplying equipment or making repairs to other companies' vessels.
If you are leasing the vessel, then you will need MEL coverage and not Jones Act.
What is the difference between MEL Coverage and Jones Act Coverage?
The Jones Act covers employees onboard vessels owned, leased or operated by your company, while MEL covers incidents that may occur while an employee is working on a vessel owned and operated by another party.
So one can see that it boils down to this, if you own the vessels, then Jones Act Coverage is needed and if you do not then MEL Insurance is needed.
1) Is an employee who delivers food to a cruise ship but does not go on board covered or do I have to purchase Longshoreman Insurance for this employee?
NO. Employees temporarily doing business on the premises of a maritime employer, but who are not engaged in work normally performed by the employees of the maritime employer are not covered under the Act.
2) Employees engage in diesel engine repair on recreational powerboats. The repair work is either done in the shop or on the boat. About 80% of the boats worked on are under 65 feet in length. Is coverage needed?
YES. Longshoreman Insurance coverage must be provided for those directly involved in the installation or repair of diesel engines on board a recreational vessel 65 feet or more in length.
3) The insured installs flooring services on ships both inside and out. The work is being done for the Navy. Are these employees covered?
YES. The employer has definite exposure under the Longshore Act, as the activities constitute ship repair.
4) Would I as an employer who rents out recreational boats be subject to the Longshore Act?
NO. Section 2(3)(b) of the Longshore Act excludes such individuals from coverage.
5) Would my business that rebuilds and remanufactures small boat motors, whose owner occasionally goes out on the water to test these motors, need Longshore coverage?
NO. Not unless the boats were commercial vessels or recreational vessels over 65 feet in length.
6) My employer repairs stoves and refrigerators. The employees occasionally go onboard ship to repair such items. Would they need coverage?
YES. A worker who goes on board a ship to repair equipment that is installed or attached to the ship is performing maritime employment and Longshoreman Insurance or Jones Act Coverage is required.
7) If an employee is building a residential dock, (not at a marina), which will be used by recreational vessels under 65 feet in length, is he covered by the Longshore Act?
YES. The 65-foot recreational boat limitation would not be applicable. This limitation only applies to individuals engaged in building, repairing or dismantling a recreational vessel under 65 feet in length. The dock builder would be covered, even if only part of his work is performed over the water.
8) My employer does a small amount of the cleaning of officers’ quarters on a ship, less than $500 per year payroll. It is a very small part of their operation, and the U.S. Navy does not employ them. Do they need Longshore Coverage?
YES. The services provided by your company are not specifically excluded under the Longshore and Harbor Workers Act.
9)I am a commercial electrical contractor and my company performs work around the Southeast consisting of electrical wiring within buildings. We are in the process of bidding the electrical work, as a sub-contractor, for the electrical portion of the renovation work for a warehouse at the Alabama State Docks. We will perform only the electrical wiring, installing of light fixtures, inside and on the warehouse. We will not perform any work on any ships or cargo carrying vessels. Our work will be no different from any other of his jobs, except for the fact that the location is the Alabama State Docks. Does my company need Longshore coverage?
YES. Your company would need Longshore coverage inasmuch as you are repairing a harbor facility, an integral part of the loading and unloading process.
The only ones to feel this effect is those who work on recreational vessels over 65 feet in length.
How will this affect my current LONGSHORE premium?
February 17th 2009 to your natural policy expiration date.
How do I get this reduction now?
Different insurance companies and agents will have different methods. Contact your current agent.
How do Corporate Officer exemptions effect this change?
exclusion for recreational boat repair.
How do I revoke an officer exclusion?
Download and complete the revocation form from your state. For Florida, it is a DWC-250-R. File this with the state AND send a copy to your insurance agent and ask the agent to have the officer added BACK to the policy. You may be asked to sign a "No Loss" letter by certain insurance companies.
What about Officers who do EXCLUSIVELY Clerical or Sales Work?
They can use normal State Act Exclusions and Filings.
What about people signed on as "crew?"
True CREW should be covered under vessels P&I insurance, but case law holds that a crewman must spend at least 30% of their time in service of a particular vessel or identifiable fleet of vessels, so someone signed on for a week or two to perform repair/maintenance work will never escape the need to buy the proper coverage for them.
This change in the ACT is so new that there are no definite answers here, but the best opinions we could find tell us that the function goes with the Vessel. In other words, if the vessel is a new build or conversion then all work for that vessel is considered manufacturing/building.
Conversely, if the vessel is being repaired all work on that vessel is considered repair, even if it includes fabricating some parts or components.
Is a Sole Proprietor Exempt for Longshore?
Whilst in theory, a Sole Proprietor is exempt from Longshore, they are no longer considered a Sole Proprietor "as soon as they work at the direction of another." This means that working in or for a shipyard, the Sole Proprietor has the same coverage issues as all other businesses.
I only have a couple of employees, Can I opt out of Coverage Under the Longshoreman and Harbor Workers’ Compensation Act? Small Employers Opt Out of Coverage Under the Longshore and Harbor Workers Act?
There are some states where small employers as defined in the state insurance law, or even large employers under certain conditions, can “opt out” of the states’ workers’ compensation system.
Is this ever an option under the Longshore Act? Don’t even think about it.
Under section 932 of the Longshore Act, an employer has two choices with regard to the insurance requirement. The employer can purchase first dollar coverage from an insurance carrier authorized by the U.S. Department of Labor to write Longshore Act coverage, or it can obtain the authorization of the U.S. Department of Labor to self-insure its Longshore Act obligations. An employer can obtain self-insurance authorization individually, or it can satisfy the self-insurance option through membership in a DOL authorized group self-insurance fund such as The American Longshore Mutual Association). These are the maritime employer’s only choices.
The term “employer” means 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}.
In other words, if a worker is a maritime worker then his employer is by definition a maritime employer. And the maritime employer is subject to the section 932 insurance requirement.
An “employer” in section 902 of the Longshore Act is not defined by size or type of business organization, and there are only two insurance options offered in section 932.
So, no exceptions. Get the coverage.
CAN I EXEMPT MY WORKERS OR MYSELF FROM LONGSHOREMAN INSURANCE COVERAGE?
EXEMPTIONS AND A HISTORY LESSON: Prior to the enactment of the 1972 Amendments to the Act, in order to be covered by the Act, a claimant had to prove that his injury occurred upon the navigable waters of the United States, including any dry dock. In 1972, Congress amended the Act to add the status requirement of Section 2(3) and to expand landward the sites covered under Section 3(a). In Director, OWCP v. Perini North River Associates, 459 U.S. 297, 15 BRBS 62 (CRT)(1983), the United States Supreme Court determined that Congress expanded coverage with their amendment, and did not withdraw coverage under the Act from workers injured on navigable waters who would have been covered by the Act before 1972. The Court said that when a worker is injured on actual navigable waters while in the course of his employment on those waters, he is a maritime employee under Section 2(3). Regardless of the nature of the work being performed, such a claimant satisfies both the situs and status requirements and is covered under the Act, unless he is specifically excluded from coverage by another statutory provision. The Court considered "these employees to be "engaged in maritime employment' not simply because they are injured in a historically maritime locale, but because they are required to perform their employment duties upon navigable waters." 3 Perini, 459 U.S. at 324, 15 BRBS at 80 (CRT).
NOTE: one exception to exclusions 7 through 12 is that the individual must be eligible for state workers' compensation benefits.
A master or member of a crew of any vessel (Jones' Act).
The Act provides that an employer who fails to satisfy the insurance requirement shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than one year, or by both.
Where the employer is a corporation, the President, Secretary, and Treasurer shall be severally liable to such fine and imprisonment, and also liable, jointly and severally with such corporation, for any compensation or other benefit which may accrue under the Act.
An uninsured employer may also be subject to civil suit by an injured employee pursuant to Section 5 of the Act. The injured worker or his legal representative may elect to claim compensation under the Act, or to maintain an action at law or in admiralty for damages on account of the injury. 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 an employee assumed the risk of his employment, or that the injury was due to the contributory negligence of the employee.
Having Longshoreman coverage is expensive, but not having it could turn out to be more expensive than merely paying the insurance premiums. Unless and until the law is amended again, employers whose employees are working on the navigable water (and are not specifically excluded under the current statute) need Longshoreman coverage. In the State of Florida, The Department of Labor, in conjunction with the State of Florida Workers' Compensation Compliance Bureau, is working to ensure that those businesses with Longshoreman exposure have the correct insurance coverage.
I HAVE A SMALL COMPANY AND ALL WE DO IS GO TO THE SHIP AND PICK UP PAYROLL REPORTS WHEN THE SHIP IS "AT DOCK." OUR CONTRACT SAYS WE HAVE TO HAVE LONGSHOREMAN INSURANCE. DO WE HAVE TO HAVE LONGSHOREMAN INSURANCE?
1. Is the operation a political subdivision... a part of the Federal, State or Local Government?
2. Is any work performed on, over or adjacent to any body of water?
3. Is the body of water 100% landlocked AND wholly within one state?
Shipyard, Stevedore, Harbor Worker or Ship Breaker; Boat or Yacht Builder or Mfg, Boat Repair; Sales, Cleaning, Maintenance and any other services; Marina; Restaurant or Caterer; Yacht, Boat Club or Camp; Boat or Vessel Operator; Fish Farmer or Processors; Marine Contractor or Other.
5. Does the operation EXCLUSIVELY build retaining seawalls?
6. Does the operation include any traditional captain and crew of vessels?
7. Is any work performed on or from any vessels in navigation?
8. Are there any sea trials or demonstrations?
Based on the answers to these 8 questions, we can determine what types of insurance might be required. Workers Compensation alone, Longshore and or Jones Act and other Admiralty coverages such as MEL or crew P&I coverages. A quick call to our offices and we can tell you what might be needed.
IS THERE A MINIMUM PREMIUM COST FOR LONGSHOREMAN INSURANCE?
Usually, the cost for longshoreman coverages will start $12,000 and go up from there.
The Jones Act provides seamen with a personal injury negligence remedy, and the Longshore and Harbor Workers’ Compensation Act is a workers’ compensation statute. The two are mutually exclusive in their coverage. The Jones Act covers seamen (masters or members of a crew of a vessel) and the Longshore Act covers land based maritime workers.
As a practical matter there’s an overlap in coverage that causes problems for employers who must have the correct insurance coverage and for injured workers who must choose the correct remedy.
The courts struggle with this. The federal Fifth Circuit Court of Appeals has observed, “Thus, despite our continued insistence that a Jones Act ‘seaman’ and a ‘crew member’ excluded from the Longshore Act are one and the same (in other words that the statutes are mutually exclusive) we recognize that in a practical sense, a ‘zone of uncertainty’ inevitably connects the two Acts” .
The Longshore Act has a status and a situs requirement for coverage. Section 902(3) provides that the term “employee” means 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 ship breaker. Section 903(a) states that a claim must occur upon the navigable waters of the United States or on an adjoining landward area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel. Coverage includes a wide range of occupations, in addition to the traditional maritime occupations of longshoreman and shipbuilder, and includes maintenance and repair workers, construction workers, contractors of all kinds, and everyone whose work requires them to be on the navigable waters.
The Jones Act uses an occupational test for coverage, related to a worker’s relationship to a vessel. The worker’s duties must contribute to the function of the vessel or to the accomplishment of its mission, and the worker must have an employment connection to a vessel in navigation, or to an identifiable group of vessels under common ownership, that is substantial in both duration and nature.
Is a worker land based (Longshore Act) or is he sea based with his employment relationship connected to a vessel (Jones Act)? This is a fact intensive inquiry, and frequently it can go either way. Courts often resort to a 30% rule of thumb. If a worker spends less than 30% of his total work time aboard a vessel or in the service of the ship then he is probably not a Jones Act seaman.
The Longshore Act is administered by the U.S. Department of Labor. It provides for no fault, prompt payment of statutory wage replacement benefits and medical treatment. It is designed to be predictable for the employer and quick for the worker. The Department of Labor offers informal dispute resolution services, formal adjudication at the Office of Administrative Law Judges, administrative appeals to the Benefits Review Board, and judicial review by appeal to the United States Circuit Courts of Appeal.
The Jones Act is a negligence remedy, enforced by filing a complaint in court. There is the right to a jury trial. There is no government agency involved. Factors for recovery include pain and suffering, past and future wage loss, past and future fringe benefit value, medical expenses, loss of quality of life, and a host of other damage measures. Note: The stakes were raised a bit higher recently when the U.S. Supreme Court held that punitive damages may be available under the general maritime law if an employer or carrier willfully or wantonly denies maintenance and cure to a seaman.
A Jones Act recovery can be much greater than a workers’ compensation benefit. An injured worker can be expected to seek his Jones Act rights even if there is only a small possibility that he could qualify as a seaman. The injured worker can be expected to seek recovery under both the Jones Act and the Longshore Act, either simultaneously or sequentially.
The worker must be aware of the time limits for filing his claims and the possible effects that filing a claim under one Act may have on his rights under the other Act. The courts have acknowledged this: “Well recognized are the difficulties faced by the injured maritime workers who must choose whether and by what means they will pursue remedies that in substantive theory are perfectly mutually exclusive (the Compensation Act which for present purposes applies to all but seamen, and the Jones Act, which applies only to seamen), but which seem in practice to frequently overlap each other’s borders”. The court could fairly have included maritime employers among those faced with this difficulty.
The courts have not achieved uniformity on the application of such issues as res judicata and collateral estoppel – that is, when and how a claim under one Act will be affected or precluded by a claim under the other Act. It does seem likely that the acceptance of voluntary payments under the Longshore Act will not preclude a Jones Act suit by the injured worker. A final Order of a court, however, which adjudicates the factual issue of seaman status, awarding damages under the Jones Act will likely preclude a Longshore Act claim. Likewise, a final administrative Award under the Longshore Act, which fully adjudicates the worker’s non-seaman status, will likely preclude a subsequent Jones Act suit.
So what’s the difference between the Jones Act and the Longshore Act? The Jones Act gives seamen a negligence remedy and the Longshore Act is a workers’ compensation law for land based maritime workers. You’re either one or the other since the two laws are mutually exclusive, but it’s often hard to tell where an injured worker belongs.
And the broader the definition of vessel becomes, and the less seaman status has to do with vessel navigation, the more problematic it will be sorting out coverage issues in the “uncertainty zone”. This is an area where it is advisable to consult experts, either an organization that specializes in maritime insurance coverages or an experienced maritime attorney.
If I use subcontractors who do not have Longshore coverage what are the ramifications?
If your subcontractor does not have coverage for Longshore you absolutely become liable for unpaid benefits regardless of whether you have or do not have coverage. See Section 904(a) of the Act.
How does your present Insurance Agency Treat you?
One of our soon to be clients called me today and this is what he said. "You know, I know my industry is 'high risk' in terms of insurance. People can get hurt. I understand that. I also know that when I call my agent, I get put on hold and then they ask me questions in a rude way. I want you to give me a quote and if you are anywhere near to what I am paying, I am going to change to you." "I am tired of my 'snooty' agent!" Wow! Can you believe that? He goes on to say that he spends good money with his soon to be prior agent and then the agency treats him "like dirt!" We believe in treating you right. Give us a try! We have been doing this for almost 30 years...28 to be exact. I was raised on a small farm in North Alabama and know what it is to work hard "by the sweat of the brow" type stuff.
Is a sole proprietorship exempt from Longshore?
A sole proprietor who has no employees can be exempt from Longshore. However a business is not considered a sole proprietor under Longshore if working “at the direction of another”, which removes most sole proprietor from this exemption.
How do I obtain Longshore Insurance?
Longshore insurance must be purchased from an insurance carrier approved by the U.S. Department of Labor to write Longshore insurance. It is best to use an agent who is familiar with Longshore to help guide you through that process. LongshoremanInsurance.com specializes in longshore and other marine insurances.
If I have Longshore insurance, do I need the State Workers Compensation Insurance coverage as well?
Yes. Most businesses will have employees who do not qualify for Longshore benefits (clerical/sales etc) but even if you do not have these classes of employees W.C. provides the insurance necessary to do business in a particular state. The good news is that in most cases with a combined W.C. Longshore policy the only charge for WC is the normal charge associated with excluded employees.
Do I Need Longshoreman Insurance if I only...?
The following are examples which have all been categorized as Longshoreman type -jobs and require Longshoreman benefits by law.
A Bookkeeper. But you say, “this is clearly a clerical job”! However, this bookkeeper collects invoices and drops off packing crates in the warehouse. What about the security guard who patrols the warehouse? The Longshoreman Insurance Act excludes “security,” but courts have said that the word “office” modified the word “security.” What this means now is that ONLY “office security guards” are excluded but the security guard making rounds in the warehouse or out near the water is NOT EXCLUDED. It is probably safe to say that not many marine guards confine their security work to the office only.
What about a roofer who is roofing a marina storage building?
Or what about an artisan tile contractor who has been hired to tile the cruise ship terminal bathroom?
Ok. Let’s look a moment at subcontractors. If the subcontractors does not have his or her own insurance, then that subcontractor is insured by the General Contractor or the marina, or the entity hiring them to do some work whether or not the General Contractor or marina know it! What this means is that if the subcontractor does not have his own insurance (uninsured subcontractor), then come audit time the entity doing the hiring will be responsible for paying USLH or longshoreman insurance premiums on the subcontractor who did the work. Or it could be that the subcontractor says, "I have general liability insurance and also workers compensation!" However, the subcontractor does not have longshoreman insurance (USLH) unless he specifically told his insurance agent or broker that he required USLH coverage. Hopefully, the hiring entity does have USLH insurance in case of an accident, injury or mishap. If not, then we are talking EXPENSIVE for both the subcontractor and the General Contractor, Marina or hiring entity! Sometimes we run into situations whereby the General Contractor is EXEMPT from having to have USLH insurance. However, the subcontractor does a job that required them to have USLH insurance, and then the marina or hiring entity then becomes liable for any unpaid USLH benefits! Pretty scary stuff indeed!

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