Frequently Asked Questions

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.

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.

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.

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.

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.

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.

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.

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.

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.

Longshore Reform Act of 2009 FAQ

Who does this change affect?

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?

The will vary by state, but for example in Florida it will result in a reduction of the current LONGSHORE premium by approximately 55% for those people affected by this change for the period from 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?

If Officers who do any MARINE work on ANY vessel of any size attempt to use the officer exemption under various State Act law, they the lose the exclusion under LONGSHORE and are then are required to carry LONGSHORE coverage. Revoke those exemptions in order to protect the LONGSHORE 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.

What constitutes Manufacturing/Building?

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.

An “employer” is defined in section 902(4) of the Longshore Act:

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).

When the Act was amended and coverage was expanded in 1972, many small marinas and boat builders went out of business due to the higher costs of Longshoreman insurance premiums. A cry went up from those business folks affected, and Congress heeded that cry (a mere 12 years after the 1972 amendments!). With the 1984 amendments, Congress excluded certain workers from coverage:

An officer or employee of the United States or any of its agencies.
An employee of any state.
An employee of any municipality.
The agent of any foreign country.
An employee whose injury is caused solely by his intoxication.
An employee whose injury occurs as a result of his attempt to injure or kill himself or another.

Office clerical, secretarial, security, or data processing personnel who perform non-maritime tasks exclusively.

Personnel working for a club, camp, recreational operation, restaurant, museum, or retail outfit.

Personnel employed by a marina including those taking reservations, servicing boats, preparing and serving food, or performing routine tasks.

Personnel working for suppliers, transporters, or vendors 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. This would include a teamster delivering a load of steel to a shipyard; however, an employee of a subcontractor performing a peripheral part of the shipbuilding or ship repair process at the shipyard would be covered.

Aquaculture workers, which includes personnel who clean, process, or can fish and fish products, and a commercial enterprise involved in the controlled cultivation and harvest of aquatic plants and animals.

Personnel working on the construction, repair, or dismantling of any recreational vessel under 65 feet in length.

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).

Any person engaged by a master to load, unload, or repair any vessel under 18 tons net.
Unfortunately for dock builders, they were not included in the list of those excluded from coverage under the Longshoreman Act. Hence, dock builders or marine contractors who build docks behind private homes, or do any kind of marine construction, even if they are working in two feet of "navigable water" (or less!) have Longshoreman exposure, and under the law, must have Longshoreman insurance coverage. Failure to have coverage is against the law, and carries serious consequences for an employer who fails to satisfy the insurance requirement:

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.