With legislation in place that directly impacts maritime employer liability, there is a perfect storm brewing among the issues of worker’s compensation and liability insurance.  Two federal acts, the USL&H and the Jones Act, threaten to expose employers to broad financial risk that is best managed by arming yourself with knowledge.  Through our far-reaching research on the intersection of these important issues, we have established a comprehensive resource for your insurance needs.

The USL&H: Protections for Some, Liability for Others

Under federal law, there are protections in place to shield individuals that have lost their ability to work through death or injury that is incurred while operating on navigable waters of the United States.  The act, known both as the USL&H and the Longshore Harbor Worker's Compensation Act, offers compensation to employees who qualify under the code language.  The specifics of the statute are relatively broad in their interpretation of navigable waters which are construed to include numerous physical structures such as an adjoining pier, wharf, dry dock, terminal, building way, marine railway or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling or building a vessel. 

The origin of these federally imposed protections can be found in the ship building industry.  Initially created to safeguard employees laboring as longshoremen on the waterfront, the USL&H now casts a wider net in its provisions.  Over time, through judicial precedent and the steady progression of case law, the act’s safeguards have been greatly widened to include applications for marine contractors, diving contractors, service companies supplying equipment "on the water" and ship repair operations.  This means that virtually any employee or business whose labor arrangement requires working on navigable waters is affected by the legislation. 

The Jones Act: Negligence

Codified in 2006, the Jones Act officially granted longshoremen the enduring and long recognized right to recover financial damages from their employers.  These claims must be based on alleged negligence committed during the course of employment by the admiralty staff (such as a captain), the ship owner or even co-workers that are part of the ship’s crew.  In addition, the Jones Act also extends the claim of negligence to vessels deemed to be unseaworthy.  The one mitigating factor of this law was imposed by the Supreme Court in 1995 when it declared that a laborer is only protected by this legislation if his work requires spending at least 30% of his time working on a vessel on navigable waters.  Thus, both the nature of the work and the duration of such labor are both factors in determining the liability of a maritime employer. 

The Defense Base Act: Domestic Contractors in Foreign Lands
Under this federal legislation, employees laboring abroad must be covered by workers’ compensation insurance secured by U.S. government contractors and subcontractors.  This primarily applies to civilian workers employed on U.S. military bases located outside the United States or individuals engaged in public works for national defense while fulfilling a contractual agreement with the U.S. government.  This act has far reaching ramifications for government contractors as it significantly increases the liability exposure that employers must assume in the course of business. 

Effect of the Laws:  Are You Covered?
These protections afforded to employees greatly benefit worker safety and, it is assumed, broaden the pool of available laborers willing to submit to the risks inherent in navigable waters projects.  However, the employers subject to this federal act are in a different boat altogether.  The effect of such laws has an immediate and significant impact on the fiscal resources required to run a profitable enterprise.  With the expense of complying with the USL&H factored into the cost of operating a successful business, it can seem that employers are also in need of protection.  This is where we can help.  We provide comprehensive insurance to shield you from the extensive liability that accompanies this line of work.  As part of our service package, we also provide consulting services that will educate both you and your regional insurance agent in these subjects so that you can approach your business liability from a thoroughly educated standpoint.  

Consequences resulting from the USL&H are serious for businesses, particularly those companies with incidental exposure.  This encompasses businesses that have peripheral contact with navigable waters but don’t use them as part of their primary work.  For example, this would apply to marine, dock and seawall contractors whose employees work on canals and tributaries that simply lead into navigable waters like the Intercoastal waterway and the Atlantic Ocean.  To complicate matters, Longshore claims are invalid under the state workers’ compensation platform because they are not granted coverage through this entity.  Instead, Longshore matters are addressed by the U.S. Department of Labor and are subject to more stringent stipulations such as a higher benefits schedule, stricter reporting deadlines and heftier fines of up to $10,000 for noncompliance.  Given these restrictions, the future of your business may depend on proper coverage.  We encourage you, particularly if you utilize a leasing company or PEO for state compensation, to receive a comprehensive review of your liability exposure through our insurance consultation.

Information for State Workers Compensation Insurance