Frequently Asked Questions
January 21, 2020
Commercial General Liability insurance covers construction projects based on land. These policies generally outline a list of exclusions, including any work done onboard ships, docks, or piers. More likely than not, most brokers use this type of policy for land and marine-based projects, not knowing that they are selling the wrong coverage to their marine clients. This is especially true if the broker does not deal with many or only a few marine clients.
If you as a contractor will take a look at the "exclusion" page of your policy you will be shocked to find that work on a boat, a dock or a shipyard, then there is NO coverage!
That is why it is essential to make sure you have a Marine General Liability policy. One major area of concern for a marine risk is the coverage for care, custody, and control. This coverage is critical for ship repairers, especially, and is a standard coverage on an MGL or Marine General Liability policy.
Marine General Liability policies are designed specifically for those who work on vessels, docks, and ports. These policies provide Marine Contractors, ship repairers, and other COVERAGE.
Contractors that work as welders or carpenters frequently have projects on ships or ports. Mostly they work on land and are land-based. So usually they likely carry commercial general liability insurance and do not realize that their current policy DOES NOT COVER work that they do on a port, a vessel or in shipyards. In addition, most shipyards, vessels, or ports aren’t going to check and make sure the contractor has the correct insurance. This is where problems can arise since the contractor will not have the right coverage if there is an event of loss or an accident.
For this reason, it is important to work with an insurance broker or insurance partner who understands your business and what you do.
Longshoremaninsurance.com works with marine contractors on a daily basis.
March 11, 2019
Answer: General Liability policies generally EXCLUDE marine work. General Liability policies are written to cover most non-marine liability events and are not meant to cover work around the water. General Liability coverage is usually cheaper than Marine General Liability because of the EXCLUSIONS written into the policy, and many brokers and marine business owners think, “liability coverage?” “Oh, yes, we have that, check, and move on.” The broker and the marine business owner never know UNTIL there is a claim denied and “OUCH, coverage denied” because your worker was working in or near the water. Lawsuits are expensive, and you need to make sure that you are buying the correct coverages. That is the reason one should use a marine specialist, a Longshoreman Insurance specialist, not an insurance generalist. Would you let your general practitioner perform heart surgery? Of course not!
If you have questions or would like to change your coverage from a General Liability policy to a Marine General Liability policy, give us a call at
(205) 221-5466 or email us at [email protected]
Question
Residential Home Builder -
June 23, 2018
Answer: When this client came to us, they had been trying to do something for 2 weeks and kept getting the same answer. We spent one week and got some answers and tentative rates for this prospective client. “Yes, we can do that” is part of our innate mindset. We quoted the longshoreman insurance, the State Act workers compensation and the Marine Employers Liability with some “subject to” or “indication” of what the rate will be. Most importantly, we let the client know that “Yes We Can” is part of what we do.
February 28, 2018
We see many contractors who have been in the construction business for years and then they get a few marine related jobs, and they have trouble getting the proper insurance at a price that they can afford. Or we see a new marine contractor who is new to the marine construction or construction field.
We have seen this now for over 10 years and have finally come up with a solution to their needs. In the past contractors were faced with having to pay $15,000 premium up front just for the USL&H or Longshoreman Insurance.
With proper guidance, a USL&H policy can be found to get the small or large marine contractor an entry into the marine insurance world that doesn't require a mortgage! LongshoremanInsurance.com can be reached at [email protected] or by texting or calling their main number at (205) 221-5466.
October 6, 2017
Longshoreman Insurance and Claims Payments -
Answer: Those who are already on temporary and or total disability will see an increase of payments going forward from October 1, 2017. Payment is made according to minimum and maximum wage limits set by the U.S. Department of Labor (USDOL)which administers the Longshore Act. The new National Average Weekly Wage was recently announced, and it reflects a 2.46% increase over October 1, 2016. The new weekly minimum wage is $735.89 and the maximum weekly rate under the Longshore Act is $1471.78 or 200% of the minimum. However, you as a marine business owner or a marine contractor do not have to worry to much about this. Just make sure that you have the correct marine insurance coverage in force and deal with a broker who deals with marine insurance on a daily basis.
September 1, 2017
Longshoreman Insurance Questions for Marine Contractors
Answer: A typical marine insurance underwriter will ask the following questions at a minimum:
1. Do you provide proper training and supervision to employees working on/around heavy equipment?
2. Is respiratory, hearing and eye personal protection equipment (PPE) provided?
3. Are machine operators certified?
4. Is equipment certified on a regular basis?
5. Are there any heavy or bulky items lifted manually? What is the maximum lbs an employee may be lifting?
August 26, 2017
UNINSURED SUBCONTRACTORS IN LONGSHOREMAN INSURANCE
This title is very misleading. There CAN BE no uninsured
subcontractors under Longshoreman Insurance, NONE!
There are only two types of subcontractors:
I. The one with their own insurance and
II. The one who is insured by you.
State Workers Compensation “Rules of Independent Subcontractors” go “out the window” here, and the pass up is 100% clear and long reaching. Longshoreman Insurance is governed by the rules of the Federal US Department of Insurance, while the State Workers Compensation Insurance policies are governed by the rules of each individual state. Both State Act Workers Compensation Insurance and USL&H or Longshoreman Insurance are required in most marine jobs. Additionally, there are no “Corporate Officer Exclusion” in USL&H or Longshoreman Insurance as there are in the State Workers Compensation Policy. Both the General Contractor and the Subcontractors are governed by the two sets of rules, Federal USL&H and State Act Workers Compensation. What is worse for any uninsured subcontractors, is that the General Contractor, or company who hires them, could themselves be EXEMPT from Longshoreman Insurance. However, by hiring an uninsured subcontractor, it brings them back into the Longshoreman Insurance venue. Two classic examples of this are Government employees and Marina employees - both of which are exempt from USL&H Insurance in most cases.
Let us say, for example, the marina hires a subcontractor to build a new dock for them (a clear Longshoreman type job), but the subcontractor does not carry Longshoreman Insurance. The marina itself becomes liable for unpaid benefits but typically will themselves be uninsured for Longshoreman Insurance, as they are exempt and thus suffer all the monetary penalties and possible jail time.
The same is true for the Government who subcontracts stevedoring work to an uninsured employer.
Remember, it is ALWAYS best to employ a MARINE INSURANCE PROFESSIONAL because unless your broker or agent deals with longshoreman insurance or marine insurance on a daily basis, then they have no idea how to properly insurance a marine type risk. You will be left with no insurance and having to sue the agent, who will have to rely on his or her Errors and Omissions Insurance. In the meantime, you will have a large problem!
Email us with [email protected] for questions or our office hours are from 9AM-4PM CST M-F.
Phone (205) 221-5466 during office hours or (205) 275-5005 after hours.
July 26, 2017
Question: Our marine construction company currently has USL&H or Longshoreman Insurance and we are in the second year of a three-year Longshoreman Insurance policy with an excellent longshoreman insurance company. This insurance company has offered us two renewal options.
Option I is to renew the present contract for one more year at the present rate, or Option II is to start a new 3 year contract going forward with a reduction of rate of around 14%. Our concern is that we would be locked into a new 3-year contract at this rate (which is a good rate). We expect to increase our payroll by a couple of million dollars over the coming years. We would like the option to shop our Longshoreman Insurance coverage next year. However, we would like to still get the 14% rate reduction.
What should we do?
Answer: Most reputable insurance companies would most likely want to keep your business and to keep you happy.
Our bet is that even after one year into the new 3-year contract, you would be able to ask for rate relief if you meet 2 conditions:
1) Increased payroll, which means increased income to the insurance company; and
2) good loss experience.
June 22, 2017
Answer: Wow! Several questions there. USL&H is the acronym used for US Longshoreman and Harbor Workers Act, that's all. They are one and the same. Jones Act is a different animal. Jones Act is federal legislation that protects American workers injured AT SEA. It is sometimes referred to as the Merchant Marine Act of 1920. This law allows sailors who have been injured in accidents or who become sick while working at sea doing their duties to recover compensation from their employers. Jones Act provides for the promotion and maintenance of the American merchant marine and its purpose to promote a vibrant American merchant marine workforce for the US of A. The carriage of goods and passengers between United States ports is limited to US built and US flagged vessels.
Concerning General Liability coverages, the requirement to have USL&H coverage CANNOT be included under ANY general liability coverage!
"What is P&I?" P & I refer to Protection and Indemnity. P&I is a mutual maritime insurance provide by a P&I Club, typically a Club sponsored by one of the Lloyds of London Maritime entities. P&I is used to cover the vessel hull, other vessel risks, and also the crew. Crew coverages are for Injury, Illness, Loss of Life, Hospital, Medical and other expenses.
June 9, 2017
Answer:
The contractor would have to have the following types of insurance at a minimum:
a. Worker's Compensation/Employer's Liability insurance to include Longshoreman and Harbor Worker's Compensation Act Coverage (USLH) and Maritime Coverage Endorsement with no territorial limits or worldwide.
b. Comprehensive General Liability insurance for bodily injury and property damage for at least $1,000,000 on a per occurrence basis, covering claims arising out of or in connection with Contractor's operations or the actions of
contractor's employees and/or its subcontractor.
c. Such insurance shall name (main party, such as the cruise lines) as additional insured and with a waiver of subrogation.
The cost of the insurance will depend on the actual payroll and the number of workers that will be employed. For a one-man operation, the minimum premium will be $10,000 and this will probably be the minimum-earned amount, which means that all the premium will be earned from the "git-go" and has to be paid up front with no payment plan.
May 30, 2017
Answer:
Yes. Your company is paying at least 20% more than the average company is paying for workers compensation. If your minimum modification factor were .70, this means that your company could be paying up to 50% more than it should for workers compensation. Businesses that have more than $10,000 in premium over the last two years qualify for an Experience Modification Factor. This is sometimes called an "X-mod" or Experience Mod. These modifications factors are computed by the NCCI or the National Council on Compensation Insurance, located in Boca Raton, Florida. This factor allows the industry to charge more for companies that have more claims and to charge less for companies that have fewer claims. This gives the employer the opportunity to manage its own costs. For example, a company with a .75 mod factors with a premium of $100,000 will have a modified premium of $75,000 while a company with a premium of $100,000 and a mod factor of 1.25 will pay a modified premium of $125,000! Unlike most other insurance coverages, workers compensation and Longshoreman Insurance is the one insurance premium that can be controlled by the employer.
May 11, 2017
Answer:
We can write the clients who need the Longshoreman Insurance. However, the company’s annual payroll will need to be in the $75,000 to $100,000 range at a minimum in order for us to quote it.
Concerning your second question, yes, you are correct. Your client will need general liability (GL) and or have the GL policy endorsed to cover marine also. Without this endorsement, your client runs the risk of having an uncovered loss.
Call us at (205) 221-5466 and we can discuss risk solutions for you.
March 29, 2017
Answer:
Whether you are a staffing company or a pure marine contracting company, it doesn't matter. We have options for you.
The cost will depend on your payroll and your risk category or what you will be doing. However, we do have ways to get you started for a minimum amount of outlay if your payroll is large enough for the insurance company's appetite. In some cases we can help you get going and not have to make a large payment until 30 days after the inception of your policy. This will give you time to get some monies coming back in your direction before making a huge capital outlay of funds. We are very experienced in doing various things depending on the situation.
Again, each company situation is different one from the other. We can be reached at (205) 221-5466 to discuss your options on how to get this going. Also, for the larger companies that are already paying large premiums of say $75,000 to $100,000 per month, we need to have a conversation about options to reduce your premium outlay and to increase your net profit. We are more than just a marine brokerage house. We offer solutions to your many questions. Let's have a conversation. After hours, we can be reached at (205) 275-5005.
December 22, 2016
Longshoreman Insurance and MEL
Answer:
Maritime Employers Liability (MEL) was first written more than fifty years ago and is widely available in the market today, it remains one of the most mysterious of marine coverages-- falling somewhere between Ocean Marine Lines and Workers’ Compensation. What is MEL? MEL is coverage for an employer’s liability to its employees that would fall under Admiralty Law, roughly equivalent to Workers’ Compensation when someone is on a vessel. It can include Jones Act as well as General Maritime Law remedies including Maintenance & Cure, Unseaworthiness, and Death on the High Seas Act.
MEL is NOT a compensation policy and does not cover any benefits available under Workers’ Compensation, Longshore & Harbor Workers Compensation Act, Outer Continental Shelf Lands Act or any other state or federal workers’ compensation system. Most MEL policies contain specific exclusions for all those, but some older policies did not contain these exclusions and are specifically endorsed to add them. Confused yet? In addition, MEL is not a replacement for a Protection and Indemnity (P&I) policy. A P&I policy offers not only coverage for employees, but also a large amount of third party bodily injury and property damage liability coverage not found in the MEL policy. Further, most MEL policies exclude the true “crew” of an employer on owned vessels. Those are the people specifically covered by most P&I policies. MEL is one of the most critical parts of many marine insurance programs and, if properly understood and placed, can provide essential coverage.
MEL covers two groups of workers:
1) Your employees on someone else’s vessels. Small or large, oil rig, yacht, barge, or cruise ship, you have a liability for your employees when placed aboard other vessels even though you are not the owner or operator of that vessel. In addition, most vessel/rig owners will require the employer to prove MEL coverage is in place under their contracts before allowing your employees aboard their vessels. Who does a MEL policy cover? AND it covers,
2) Employees who are temporarily on board one of your own vessels. For example, a marine construction company may have a full-time captain who is covered under their P&I policy, but also employ some land-based employees who work on board vessels part of their time. These land-based employees can be best covered under MEL. Unfortunately, the courts have held that certain employees who fall under the Longshore Act can also bring claims under Admiralty Law. Call our offices at (844) 667-6640 to schedule a consultation. Also, you may email us at [email protected]
November 8, 2016
Exclusions fall under the “Status” portion of the Longshoreman Act. “Status” has to do with an employee’s job. The term “employee” means any person engaged in maritime employment, including any longshoreman or other person engaged in longshoreing operations, and any harbor-worker including A ship repairman, shipbuilder, and ship-breaker, but such term does not include:
A) individuals employed exclusively to perform office clerical, secretarial, security, or data processing work:
B) individuals employed by a club (example is a yacht club), camp (think youth camp), recreational operation (jet skis, personal watercraft), restaurant, museum, or retail outlet;
C) individuals employed by a marina and who are not engaged in construction, replacement, or expansion of a marina (think direct employees of a marina)
D) individuals who are employed by suppliers, transporters, or vendors, are temporarily doing business on the premises of an employer described above and are not engaged in work normally performed by employees of that employer under this ACT.
E) aquaculture workers;
F) individuals employed to build, repair, or dismantle any recreational vessel under sixty-five feet in length; (Some individuals may be subject to coverage under a State Workers Compensation Law)
G) a master or member of a crew of a vessel;
or
H) any person engages by a master to load or unload or repair any small vessel under eighteen tons net;
IMPORTANT NOTE: (OWNERS CANNOT EXEMPT THEMSELVES UNDER THE LONGSHOREMAN ACT)
October 20, 2016
This coverage is NOT site specific. It is good to have this coverage and sometimes can be obtained at no extra cost.
This is a critical coverage for Contractors and Sub-contractors or Ship Repairers. For your liability sake, please make sure that this is covered under your policy Are you familiar with the "DISCOVERY PERIOD" on your Marine General Liability Policy?
Some policies will say something like: "Notwithstanding anything contained herein to the contrary, this Insurance shall not cover any liability in respect of loss or damage specified herein unless discovered and reported in writing to Underwriters within 12 months after policy expiration. This can be a very bad clause to have in your policy. Have your agent negotiate to remove this clause from your policy, or at least extend the discovery period to up to 60 months.