By Chris Richmond
For January 2023 WorkBoat Magazine.
Shipyards and marine related business comprise a wide variety of jobs which in turn require different forms of workers compensation coverage. What your employees are doing will determine what coverage extends to their injury. Take a moment to review these three areas of injury coverage.
Jones Act: Officially titled “The Merchant Seaman Act of 1920,” this covers your employees who are considered crew members on your vessels. Seamen employed on vessels traveling from U.S. port to U.S. port are entitled to coverage under the Jones Act, with the coverage provided under your vessel’s Protection and Indemnity policy. Crew are covered for injury and illness while ‘in service to the ship’ through the Maintenance and Cure portion of the coverage. Crew are also entitled to sue the ship or ship owner for unseaworthy or negligent conditions which they believe caused their injury. To be considered a crew member, the employee must spend roughly a third of their time at work in service to the ship.
USL&H: Employees who are working around docks, wharves or servicing a vessel will fall under the U.S. Longshore and Harborworkers Act. These are your stevedores, repair crew, crane operators or similar employees who service, load or go on and off vessels but are not considered crew members. The two determining factors for USL&H are Situs and Status, both of which need to be met in order to be eligible for this coverage. To meet the Situs test, the injury must have occurred while working on or near navigable waters. The Status test is met by the work being done. Exclusions include office workers, aquaculture and boat builders who build recreational vessels less than 65 feet in length. Even if you have a boat yard where you feel you would never have a USL&H risk, it is very inexpensive to have this coverage added to your state workers compensation policy on an ‘if any’ basis. This way you at least have some defense covered should a USL&H claim be filed against you.
State workers compensation: Your office staff and other employees are covered under your state workers compensation act. Keep in mind that if you have employees who work in other states besides the one where your business is located then you need to list these as well. State workers compensation acts are no-fault laws which means they cover a claim as long as the employee’s accident happened within the scope of their employment.
This is a very quick explanation of a very important insurance coverage. Take the time to review your operation and exposure with your agent to help you get the coverage you need.