WorkBoat Columns

By Chris Richmond
For WorkBoat Magazine

As a business owner your employees are an important part of your operation. Depending on their job description, your employees are covered under your workers compensation, USL&H or Jones Act policy. But what protects you as the employer when one of your employees makes a claim against you? Unless you have Employment Practices Liability Insurance (EPLI), you may be left with no coverage.

EPLI is used to cover claims made against an employer by an employee for discrimination, wrongful termination, sexual harassment or retaliation. While these are the most common types of claims, other claims could include failure to promote, invasion of privacy, defamation or negligent evaluation. One of the more important parts of this type of coverage is defense costs, which, as you can imagine, can mount quickly. Unfortunately, most EPLI policies have defense costs within the limits. In other words, your defense can eat up a good part of your total liability limits before any judgement is awarded. Because of this, you should look at higher limits; often the premium is not a huge jump to add an additional $1 million of coverage.

Those covered under an EPLI policy are your employees, management and your directors and officers. An endorsement can be added to the policy to also include third party coverage. This provides coverage for claims made against you by non-employees.

One area that employers need to keep in mind is the potential for claims against accessibility to their websites. Your EPLI policy could have some coverage here but only if you have third party coverage. This provides coverage for potential claims made under the Americans with Disabilities Act.

EPLI can often be attached to a workers compensation policy, a directors and officers policy or written as a stand alone. Limits can vary so be sure to compare coverages. Whichever way you get it written, EPLI is an important part of your risk management and one that can prove to be very useful in our ever-growing litigious society. If your agent has not brought this up, be sure to give them a call and ask them for a quote.

By Chris Richmond
For WorkBoat Magazine
Recently, a local shipyard we work with was visited by the loss control manager from the insurance company that writes their USL&H coverage. This was a good visit all around. Although the yard and the insurance company have had a longstanding relationship, recent losses required the insurer to make several large payouts, resulting in a premium increase for the shipyard. This is not good all around.

USL&H premiums are based on payroll and the types of work employees perform. The larger the workforce, the more a company pays. Then, loss experience is factored in. The more claims you have, the higher your premium will be. It’s easy to forget about past claims – until you experience a serious case of sticker shock when the premium notice arrives.

For many years, the mindset at many yards has been to “get the job done”– a phrase often seen as a mark of strong work ethic. But it’s just as important to include the word “safely.” And the expense of a claim does not stop at medical bills. The indirect costs a yard incurs from a claim due to work stoppage, extra paperwork, corrective actions, lost time worked by injured, etc., can add up to an additional 66% of unseen costs to your business.

At our local shipyard, the loss control manager presented a spreadsheet covering five years of claims. It detailed the injured body part, the job being performed, and the cost associated with each incident.  A subsequent tour of the yard found spots for the safety director to focus on to help prevent future accidents. Suggested changes were made and a follow-up visit in four months was scheduled.

The insurance company’s loss control manager recognized this long-term relationship and provided valuable (and free) guidance to our insured to help reduce injuries at the workplace. The hope is that a safer work environment will lead to fewer accidents, fewer claims, and ultimately, lower USL&H premiums. The money saved can be invested elsewhere. Clearly a win all around.

By Chris Richmond
For WorkBoat Magazine

Passenger vessel operators have many options for risk management. While much of this focuses on board the vessel, one often overlooked area is before passengers even board. By adding terms and conditions to your ticket sales, you can add another layer of protection.

Including terms at the time of purchase can help:

• Limit liability for risks, including passenger injury
• Control time limits and specify legal jurisdiction to manage litigation
• Clarify refund policies for cancellations or delays, including force majeure clauses

Passenger injury. You may not be able to have all liability waived, and you will still need to comply with maritime law, but by informing your passengers that by purchasing a passage ticket they accept and understand that travel at sea can be potentially dangerous.

Time limits and specifying legal jurisdiction. Being able to manage potential litigation can minimize legal expenses as well as the inconvenience of fighting a lawsuit long distance. You will be thankful you have established this should a passenger who cruised with you in Boothbay, Maine file a claim in their hometown court in Houston, Texas.

Refund policy.  You can control many things on your boat but you cannot control the weather. Include a force majeure clause detailing situations where you are not liable for cancellations due to events outside of your control which result in delay or cancellation.

It goes without saying that you should consult a professional when preparing this language. An admiralty attorney would be able to draft this document to suit the type of trip that you are doing and to make sure that you are abiding by the state and federal laws applicable for your location.

Risk management comes in many different forms. Proper terms and conditions on your boarding pass can be just as important as the life jackets that you keep on board.

By Dan Bookham for WorkBoat Magazine

Throughout the year insurance companies meet with their agents and brokers to keep tabs on the shape of the market. Across the board and across all product lines, the most frequently flagged concerns are the potential impact of tariffs and ongoing economic uncertainty on the U.S. insurance market in 2025. Savvy insureds should be factoring this into their buying decisions.

Tariffs on imported goods, such as automobiles, auto parts, building materials (lumber, steel, etc.), and electronics, have already directly inflated the cost of repairs and replacements covered by insurance policies. This will in turn mean higher premiums as insurers will likely pass these increased claims costs onto policyholders to maintain their solvency and profitability.

Supply chain disruptions could also be a factor as the tariffs find their final level and different economic inputs begin to price for the new cost of materials. As we saw during the pandemic, such disruption can cause delays in repairs and increase the duration of claims. This can further drive up administrative costs for insurers and cause frustration for policyholders.

Industries heavily reliant on imported materials will see increased operating costs, potentially leading to higher commercial insurance premiums, not least as the replacement value of inventory, parts, fuel and other overhead will mean a need for higher exposures and policy limits.

While the tariff negotiations and adjustments appear to be ongoing, the insurance industry will continue to feel the impact of economic uncertainty such unprecedented change has brought about. Should we find ourselves in a downturn or recession, there are several things to consider on the insurance front.

During economic downturns, businesses and individuals might reduce their insurance coverage limits, opt for higher deductibles, or even cancel policies to save costs, leading to a decrease in premium income for insurers. Economic uncertainty can also increase the risk of businesses defaulting, impacting commercial insurance lines like trade credit insurance.

Investment income volatility also has a direct bearing on insurance premiums. Insurers rely on investment income. Volatile financial markets can negatively impact their investment returns, potentially pressuring underwriting profitability and leading to higher premiums. Seemingly paradoxically, insurers might adopt more conservative underwriting practices during uncertain economic times, despite the need to generate more revenue, tightening eligibility guidelines and increasing scrutiny. This is because the quickest way to not lose money on exploding claims costs is to not write the business in the first place. A crude lever to be sure, but one that does get pulled.

Economic hardship can exacerbate social inflation (increased litigation and higher jury awards), particularly in liability lines, driving up claims costs for insurers. This has been an ongoing trend for several years already; we will have to see if economic conditions accelerate this even more.

In summary, the combination of tariffs and economic uncertainty in 2025 is likely to create a challenging environment for the U.S. insurance market. Policyholders can expect to see upward pressure on premiums across various lines of business. The ability of insurers and policyholders to proactively manage risks and adapt to these evolving conditions will be crucial in mitigating the negative impacts.

By Dan Bookham 
For WorkBoat Magazine 

Workplace safety is not merely a physical concern but also a complex emotional issue with far-reaching consequences for individuals, teams, and organizations. A comprehensive approach to workplace safety must address emotional factors, otherwise it is doomed to fail. A hearts-and-minds approach to keeping your people safe is always going to pay more dividends than folks dutifully checking boxes without investment in the philosophy behind your safety culture.

Should this all seem a bit too touchy-feely, consider the following. Safety at work is undeniably an emotional issue because the very human drivers of connection and fear underpin the decisions we make every day that could potentially imperil life and limb.

On the individual level, this translates to a basic fear of loss. The fear of injury, illness or even death is inherent to human nature. This fear can be paralyzing or motivating, depending on how it is managed. We also worry about teammates, as employees often form strong bonds with coworkers, creating a sense of family and community. The safety of colleagues becomes a deeply personal matter, driven by love and care. More than anything else, the instinct to protect oneself is primal. When safety is compromised, it triggers strong emotional responses related to survival and well-being which can set off a chain reaction of events that can amplify risks as much as lessen them.

Unsafe work environments can lead to chronic stress and anxiety, affecting employees’ mental health and overall quality of life, and the experience of trauma – for both an injured individual and their colleagues who were present – can have lasting impacts and cause employees to lose trust in their employer and feel a diminished sense of control over their work environment. This in turn can lead to a doom loop of anger and frustration which fuel reckless behavior, increased risk-taking, and reduced attention to safety protocols.

While negative emotions can spread rapidly through a workplace, creating a climate of fear and distrust which can hinder safety efforts, positive emotions are even more contagious and can boost morale, increase engagement, and promote a proactive approach to safety. When a team feels it in their bones a supportive and collaborative safety culture meets their emotional needs in the workplace, we see improved communication, conflict resolution and decision-making, all of which are powerful force-multipliers when it comes to reducing harm.

Emotions are a powerful force that can either enhance or hinder workplace safety. By understanding the impact of emotions, organizations can develop strategies to create a positive and safe work environment. Exploring and developing specific strategies that help you understand, manage and mitigate the impact of emotion on safety culture in partnership with your workers comp, USLH and P&I insurers is a smart way to benefit from the premium dollars you pay for your policies.