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A growing concern for some in the marine industry, particularly here in the Fort Lauderdale, FL area, is the challenge of obtaining affordable Workers Compensation insurance with USL&H for their business. Most yards have requirements that all contractors maintain General Liability and Workers Compensation insurance in order to work on their premise. Without meeting such requirements, contractors sacrifice the ability to work and generate revenue. While the General Liability piece may be easier to place, Workers Compensation has grown increasingly difficult due to regulation that impacts the industry and, consequently, the availability of such coverage.

The challenge to placing Workers Compensation coverage lies in an endorsement to the policy mandated by the United States Longshore & Harborworkers’ Compensation Act (USL&H). This federal law was enacted to provide benefits for injured employees when working on or near navigable waters of the US and engaged in maritime employment. The act covers employees in traditional maritime occupations such as longshore workers, ship-repairers, shipbuilders, and harbor construction workers, but only if they are employed to work on the navigable waters of the US or adjoining areas, including piers, docks, terminals, wharves, and those areas used in loading and unloading vessels. Non-martime employees may also need to be covered if they perform their work on navigable water. There are exclusions to the Act for the following individuals if covered under state act Workers Compensation:

  • Individuals employed exclusively to perform office clerical, secretarial, security, or data processing work.
  • Individuals employed by a club, camp, recreational operation, restaurant, museum, or retail outlet
  • Individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance)
  • Individuals who (i) are employed by suppliers, transporters, or vendors, (ii) are temporarily doing business on the premises of an employer whose employees are employed in maritime employment, and (iii) are not engaged in work normally performed by employees of that employer under this Act
  • Aquaculture workers
  • 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
  • A master or member of a crew of any vessel
  • Any person engaged by a master to load or unload or repair any small vessel under eighteen tons net
  • Employees of the US government or of any state or foreign government

The act includes penalties for failure to maintain coverage including misdemeanors, fines, imprisonment and personal liability for any compensation or other benefit which may accrue in respect to any employee injury.

Maintaining such coverage is necessary for all employers who qualify however, the pool of insurers willing to offer this coverage is much smaller than those offering state act Workers Compensation. Further, most carriers that offer USL&H coverage have minimum premiums that make is difficult for small businesses to obtain. Meaning, if you only have a couple employees or do incidental work that qualifies, it can be a chore to find proper coverage. If you fall below the minimum premium level, one option is to ask your insurance broker to find a carrier that will use ‘consent to rate’ forms and increase rates to meet their minimum. The other option would be to obtain coverage through the state run Workers Compensation provider, in Florida this is the FWCJUA. Neither option is optimal, however, if it means the ability to operate, these are sacrifices that need to be made.

Biscayne Risk & Insurance Group works closely with the Marine Industry to assess companies’ risk and negotiate insurance on their behalf. Contact one of our advisors to navigate the process. We will make sure you understand your options as we put you in the best position to obtain coverage.

Matthew Pitnick

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