Frequently Asked Questions

Update February 22, 2016 - New Question

This question came to us today. "Other than Longshoreman Insurance or USL&H Insurance, what other types of insurance will we need in order to work aboard a ship doing underwater mapping of the ocean floor?" "We will be joining a crew to analyze their data in order to do ocean floor mining." What is the estimated cost?

To follow are some of the coverages typically required for an ocean marine risk such as this:
I. General Liability with limits of $2,000,000
II. Marine General Liability with limits of $2,000,000
III. Employers Liability with limits of $1,000,000
IV. Bumbershoot or Umbrella Coverage with limits of $4,000,000
V. Professional Liability with limits of $2,000,000
VI. Longshoreman Insurance with limits of $1,000,000
VII. State Act Workers Compensation Insurance with limits of $1,000,000
VIII. Automobile Liability Insurance with limits of $1,000,000
The cost of all these coverages on an annual basis will be expensive, depending on the payroll and the gross income of the operations to be performed. All policies are written on an annual basis. The USL&H policy minimum premium will be $15,000 with no payment plan. The other coverages will have a payment plan available with at least 25% down payment and the balance over 8 to 9 payments.

Not all operations will require all the above coverages. Some will only want the USL&H and the liability coverages plus the State Act Workers Compensation coverages.

More specific information can be had with a consultation.

Update February 12, 2016 - New Question

Typically an insurance company insuring a Longshoreman Risk will ask questions similar to the following questions:

Has the applicant had any claims that were paid under USL&H?

If your workers are lifting heavy things, the company will ask: 1) Are employees provided with and required to wear safety belts for lifting heavy loads, eyewear to avoid eye injuries??

What will be the maximum height they are working on for this job? Are they required to wear proper fall equipment?

Will any of the “over water” duties be done from a vessel? If so, they may have Jones Act exposure, and we’ll need to also write an MEL policy – application attached.

The insurance company may need a copy of the cover page and index of written safety procedures

Do you have "emod worksheet?" This is the companies "experience modification factor."

If normal operations of a company is something that an insurance company usually does not like to write such as risks or companies working with insulation, abatement etc…. The policy quote would include a Job Limitation Endorsement. This would mean that USL&H coverage would extend ONLY to insured operations while doing certain operations in certains areas. Any other USL&H jobs during the policy term would be added - SUBJECT TO PRIOR UNDERWRITING REVIEW AND APPROVAL.

Update January 13, 2016 - New Question

Is there a problem, or do I need to have USLH coverage for my employees who work in foreign ports around the world?

The longshore and Harbor Workers' Compensation Act (LHWCA) provides benefits to "any person engages in operations of longshore, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker..."

The above defined persona have status under the Act which means as long as they are injured in a covered location (situs), they should be covered by USL&H and receive the appropriate benefits for their injury. "Situs," as defined in the USL&H Act, stipulates that the disability or death must occur "upon navigable waters of the United States."

So, if the US citizenship repairman is sent to a foreign port to work on a US owned vessel, for its United States based employer, and is injured while in the foreign port, is the repairman covered under the USL&H Act?

The "navigable waters of the United States" is NOT defined in the Act itself, and over time numerous cases have arisen seeking to define the seaward extent of the navigable waters of the United States. Like a bunch of other provisions of the Act, decisions handed down by the legal system clarify the issue. The Administrative Law Judges (ALJ's), the Benefits Review Board (BRB), the federal appeals and circuit courts, and also the US Supreme Court has ruled in such cases as Cover Tankers v. United Ship and Reynolds v. Ingalls included the high seas provision in the definition of the navigable waters of the US. Then along came the decision in Weber v. Loveland and Grennan v. Crowley, which found that there was coverage provided in foreign ports. Most recently, the trend was reversed as the Federal Circuit Court held in Kelly v. Tracy that the Constitution and Congress of the United States has no jurisdiction in foreign waters! What confusion, huh? So the waters are a still muddy, but it does seem that the trend now is that the USL&H ACT will NOT provide coverage in foreign waters.

So what is a company supposed to do? How to best protect your company and your employees in the world economy that we find ourselves in? One solution could be to attach an endorsement called Foreign Voluntary WC endorsement or get an International Package of coverages including workers compensation. However, these coverages DO NOT provide for the USL&H Act. So what coverage is needed?

The only way to really cover yourself is to buy the USLH Coverage, which eliminates the "navigable waters of the US" provision or is a true coverage for worldwide exposures. However, that is not so easy. That is where our experts at longshoremaninsurance.com or Old National Insurance can work with you to provide assistance and work to provide the broadest scope of coverage possible for your clients and their employees. Our phone is (844) 667-6640 .

Update December 19, 2015 -

CONTROLLING WORKERS COMPENSATION COSTS

Most business owners sometimes believe that Longshoreman Insurance and workers compensation is controlled by the state or the legislature in the state where they live, and that they have no control over how much it costs them. That is not the case! (Workers compensation rules are State Specific, and the Longshoreman Insurance or USL&H rules are promulgated at the federal government level.) Workers compensation and Longshoreman Insurance costs is the one insurance that the business owner can control. “So how do I control my Longshoreman and workers compensation costs?” Overcharges, have you ever wondered if you are being overcharged for your Longshoreman Insurance? This is a question that you may be asking at this moment.

What causes Longshoreman and Workers Compensation Overcharges?

To follow are but a few reasons that cause confusion for the insurance company, the rule makers at NCCI and the business owners.

One reason is "Class codes." Is your insurance company applying the proper codes to the work that you are doing in your company? Another reason is improper data and record keeping by the insurance company and sometimes by the business owners. The insurance company uses complex actuarial rating formulas that are very difficult to understand at times.

Warning Signs of Overcharges

Over the past 35 years, we have found that certain things can be flags for overcharges or indicators that something may have been overlooked or not done properly and may have caused the Longshoreman and Workers' Comp premium to be higher than proper. Here are some common ones:

Classification changed to a more expensive one after policy begins

Classification changed recently to a less-expensive one (raising the question, should the employer been in the less-expensive class in years past as well?)

Increase in the workers' compensation experience modification factor after the policy begins

Recent changes in ownership

Recent changes in business operation

Employer has recently left an employee leasing relationship

Premium credits pertaining to "state act workers compensation- Does your state offer a Merit rating on your State Act Workers Compensation? Does it offer drug credits? Or a Safety Credit? Or a Contractor Credit? If an employer doesn’t realize that a premium credit might apply, and doesn’t fill out and send in the appropriate forms, the employer won’t get the premium credit.

Is your longshoreman insurance or workers compensation policy being written in the assigned risk plan, even though your company can now be written in the voluntary market with lower workers' compensation rates?

One class code may be correct in one state but wrong in another state, resulting in higher or lower premiums being paid.

Only an expert and one who deals with Longshoreman Insurance and its distant cousin of Workers Compensation can keep up with all the complex changes, mod factors, and classification codes being used. Business owners have a business to run, and our brokerage services have found ways to save Marine business and regular businesses thousands of dollars on their Longshoreman and/or workers compensation insurance. We recently saved one business over $75,750 PER MONTH on their Longshoreman Insurance.

Update December 15, 2015

Update December 10, 2015

LONGSHOREMAN INSURANCE RECENT CHANGES AS RELATES TO RECREATIONAL BOAT EMPLOYEES -

Are you involved with repair, dismantling and manufacture of recreational boats? If so, you need to pay attention to some recent changes and regulations on the (LHWCA) Longshore Insurance requirement.

A recent 2009 change in the law is as follows: IF YOU REPAIR OR DISMANTLE A RECREATIONAL BOAT OF ANY SIZE, THIS WILL NOT CAUSE YOU TO BUY LONGSHORE INSURANCE IN MOST CASES. THERE IS STILL A "maybe" questions, however. An exception to the rule is that if you are repairing a foreign flagged recreational vessel in the USA, then you fall under the exception to having to have USLH insurance. If your firm also works on non-recreational vessels, then make sure that you keep excellent records showing the payroll of non-recreational boat repair work and recreational boat repair work. This can save you thousands and thousands of dollars on your Longshoreman Insurance premiums!

Other exceptions to the USLH rule is when you work on public vessels such as police boats. Keep good payroll records on this as well. Vessels used in the military or commercial uses are NOT exempted from having to buy USLH insurance.

The US Department of Labor has a website that is very good, and discussion can be found in the Federal Register.

December 9, 2015 update

Longshoreman and Marine Insurance definitions and questions.

When an entity or person charters a vessel, there are usually only 3 types of charters exercised, as follows:
A. What is a "Voyage Charter "?- a voyage charter is whereby the charterer is "leasing" space on the vessel (a cargo hold or tank) for one voyage only. The charterer is essentially "along for the ride" since he exercises very little operational control over the vessel.
B. What is a "Time Charter"? -a time charter is where the charter leases the vessel for a perior of time (usually a year or more). The charterer shares operational control of the vessel with the Vessel Owner, and the ship's Master answers to both parties. The sharing of control normally divides between the vessel's cargo operations (mostly under the control of the charter) versus vessel operations (under the control of the Vessel Owner).
C. What is a Bareboat (Demise) charter? - this is where the charterer essentially stands in the shoes of the Owner and leases the vessel for a significant period of time. The charterer has full operational control over the vessell and bears all the expenses to operate and maintain the ship. This arrangement allows a charterer to "look like" a Vessel Owner but not carry the expense of the costly asset on his balance sheet.

In case you come across this term "Owner Pro Hac Vice," this means taking the place of another.

Longshoreman Insurance is very expensive, and the cost must be included in the bid for the job. Most of the time when a contractor is bidding on a job, there will be a "Spec Sheet of Insurance Required." To follow is a SAMPLE INSURANCE AGREEMENT or "insurance required specification sheet:

November 28, 2015

Our agency insured this client just last week. His company is a welding and repair contractor on the Gulf Coast and had to have State Workers Compensation, Longshoreman (USLH) Insurance and Marine General Liability for his operations. They do not work aboard a ship, but work near the dockside. We have had clients who were required to have the USL&H or Longshoreman Insurance in place even though their job site was 5 miles away from the Bay or the body of water. As he is just now getting into business, we had to search our markets to get him coverage at a price he could afford. We call and emailed over 7 of our insurance companies before we arrived at a premium amount he could afford and one that had all the necessary requirements to satisfy his contract. It took us a couple of weeks to secure his quotes and his coverages. His projected payroll is around $250,000 and his down payment for the two policies was around $16,570. He will be making monthly payments as we go along and since his payroll is an estimate only, he will be keeping a sharp eye on the payroll over the coming 3–6 months in order to see if we need to adjust the payroll during the policy periods in order to avoid having a large audit due after the end of the policy period.