Below are some common maritime insurance questions regarding the Longshore and Harbor Workers’ Act and Jones Act
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).
Any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring 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, camp, recreational operation, restaurant, museum, or retail outlet;
(C) Individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance);
(D) Individuals who (i) are employed by suppliers, transporters, or vendors, (ii) are temporarily doing business on the premises of an employer described in paragraph (4), and (iii) are not engaged in work normally performed by employees of that employer under this Act;
(E) Aquaculture workers;
(F) Individuals employed to build any recreational vessel under sixty-five feet in length, or individuals employed to repair any recreational vessel, or to dismantle any part of a recreational vessel in connection with the repair of such vessel;
(G) Seamen – master or member of a crew of any vessel; or
(H) Any person engaged by a master to load or unload or repair any small vessel under eighteen tons net;
(I) Employees of the United States government or of any state or foreign government
(J) Employees whose injuries were caused solely by their intoxication
(K) Employees whose injuries we due to their own willful intention to harm themselves or others
if individuals described in clauses (A) through (F) are subject to coverage under a State workers’ compensation law
If your subcontractor does not carry USL&H coverage for Longshore exposures you may become liable to the subcontractor’s employee for unpaid benefits regardless of whether you have or do not have coverage. See Section 904(a) of the Act
A sole proprietor who has no employees may be exempt from Longshore and Harbor Workers’ Act. However, a business is not considered a sole proprietor under Longshore if he is working “at the direction of another”. This situation removes most as a sole proprietor and places them as employees, which will remove them from this exemption.
What happens if I have an injury to a Longshore employee, but did not purchase Longshore and Harbor Workers’ Act Insurance?
The penalties are severe and are detailed in the Act Section 938. Simply stated the employer and corporate officers personally are liable for any unpaid benefits under Longshore plus both also lose the protections of the Longshore Act and can be subject to a tort suit in additional to the Longshore benefits. In addition there is even the potential for jail time. The prosecuting agency is the US Department of Labor in conjunction with the US Justice Department!
Any employer required to secure the payment of compensation under this Act who fails to secure such compensation shall be guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than $10,000, or by imprisonment for not more than one year, or by both such fine and imprisonment; and in any case where such employer is a corporation, the president, secretary, and treasurer thereof shall be also severally liable for such fine or imprisonment as herein provided for the failure of such corporation to secure the payment of compensation; and such president, secretary, and treasurer shall be severally personally liable, jointly with such corporation, for any compensation or other benefit which may accrue under the said Act in respect to any injury which may occur to any employee of such corporation while it shall so fail to secure the payment of compensation as required by Section 32 of this Act.
If my business is exmpt from the Longshore and Harbor Workers’ Compensation Act, am I also exempt from the Jones Act and the other Admiralty liabilities?
No, the Longshore exemptions have no effect on Jones Act or other Admiralty liability.
Is Longshore and Harbor Workers’ Compensation Act coverage required for employees engage in diesel engine repair on recreational powerboats?
Yes, longshoreman 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.
Would a business that rebuilds and remanufactures small boat motors, whose owner occasionally goes out on the water to test these motors, need Longshore and Harbor Workers Compensation coverage?
No, unless the boats were commercial vessels or recreational vessels over 65 feet in length
Does the Longshore and Harbor Workers’ Act apply to an employee who is employed to repair recreational vessels under 65 feet in length?
No, longshore coverage does not apply to individuals employed to build, repair or dismantle any recreational vessel under 65 feet in length.
Would an employer who rents out recreational boats be subject to the Longshore and Harbor Workers’ Compensation Act?
No, section 2(3)(b) of the Longshore Act excludes such individuals from coverage
Is Longshore and Harbor Workers’ Compnesation required for a company that installs flooring services on Naval ships both inside and out?
Yes, the employer has definite exposure under the Longshore Act, as the activities constitute ship repair.
Is Longshore and Harbor Workers’ Compnesation required for an employer that occassionally repairs stoves and refrigerators?
Yes, a worker who goes on board a ship to repair equipment that is installed or attached to the ship is performing maritime employment. Depending on the frequency and vessels repaired, the worker may have a Jones Act exposure.
Maybe, individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance) are exempt from USL&H
Is Longshore and Harbor Workers’ Compnesation 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?
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 required to purchase coverage, even if only part of his work is performed over the water.
Is Longshore and Harbor Workers’ Compnesation required if an employee 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 annual operation, and the U.S. Navy does not employ them.
Yes, the services provided are not specifically excluded under the Longshore Act.
Is an employee who delivers food to a cruise ship but does not go on board covered under the Jones Act?
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 Jones Act.
I’ve been hurt offshore and my company says I’m ONLY entitle to $35/day for maintenance (maritime workers’ compensation), is this true?
No, contrary to popular belief, a company may not arbitrarily choose payment, say $35 per day, and submit that it is satisfying its obligation under maritime law. If the maintenance payment fails to satisfy the diver’s daily living expenses, it is not only unfair to the diver, it is against the law.
Most maritime actions, including injury or death, are governed by a three year statue of limitations meaning that suit must be filed within three years of the date of the accident.
Are artisan contractors who work on recreational vessels only considered State Act employees or can they be considered Longshore and Harbor Workers’ Act employees?
They can be Longshore and Harbor Workers’ Compensation Act employees if they work on NEWLY BUILT recreational vessels greater than 65ft. Even if they do not, we recommend USL&H on an incidental basis to provide defense costs at a minimum.
Do contractors who build piers for homes on navigable water and uses a barge require Longshore coverage?
Yes, the contractor may also need crew coverage(Jones Act) under a P&I/MEL policy for any barge activity
Under the Jones Act, is a mariner who has sustained an aggravated or manifested illness or injury entitled to maintenance and cure benefits?
Yes, it does not matter that the illness or injury is work or non work related. For example, if a commercial diver sustains a heart attack, contracts pneumonia, or manifests the first signs of cancer during his service to the vessel or answerable to the call of duty, his employer is obligated to provide Jones Act benefits.
Is a dock worker who is injured aboard a vessel while delivering a package entitled to Jones Act benefits?
No, the dock worker is not covered by the Jones Act and would fall under USL&H benefits
No, USL&H does not apply to individuals employed by a restaurant, club, camp, recreational operation, museum or retail outlet.
Can the owner of a commercial diving company who also performs activites as a commercial diver, exclude themselves from Longshore coverage?
No, unlike state Workers’ Compensation, corporate officers cannot be excluded from Longshore coverage if they perform Longshore duties.
The Admiralty Law covers “masters and members of a crew,” or a.k.a. “Seaman.” An employee will be classified as a seaman if his duties contribute to the function or mission of a vessel (or fleet of vessels under common ownership or control) in navigation and he has a connection to the vessel (or fleet of vessels) that is substantial in terms of both its nature and duration. As a general rule of thumb, an employee who spends less than 30 percent of his time in the service of a vessel in navigation will generally not qualify as a seaman. Contract employees who work back and forth between vessels not under common ownership are usually covered under the Longshore Act, not Admiralty Law. Employers should note that the terms “duration” and “nature” have been liberally construed by courts in favor of a finding for Admiralty Law coverage, and the 30 percent has not been defined in time so one full day could be enough.
M.E.L., simplistically, is coverage for an employer’s liability to its employees that would fall under Admiralty Law, roughly equivalent to Workers’ Compensation when someone is in service of a vessel. It can include the Merchant Marine Act of 1920 (a/k/a the Jones Act) as well as General Maritime Law remedies including Maintenance & Cure, Unseaworthiness and Death on the High Seas Act. For additional information CLICK HERE
As a practical matter, there’s an overlap in coverage that challenges employers who must have the correct insurance coverage and for injured workers who must choose the correct remedy.
The Jones Act and General Maritime Law (GML) provide a “seaman” or “a crewmember of a vessel” with a personal injury remedy based on negligence (Jones Act) or vessel unseaworthiness (GML). The LHWCA is a workers’ compensation statute. The two are mutually exclusive in their coverage. The Jones Act and GML only cover seamen and the LHWCA covers land-based maritime workers and specifically excludes seamen
The courts, employers, employees, and insurance carriers all struggle with the uncertainty on a regular basis. The federal Fifth Circuit Court of Appeals has observed, “Thus, despite our continued insistence that a Jones Act ‘seaman’ and a ‘crew member’ excluded from the Longshore Act are one and the same (in other words that the statutes are mutually exclusive) we recognize that in a practical sense, a ‘zone of uncertainty’ inevitably connects the two Acts.”
This is the problem with the coverage uncertainty. The employer must consider that it is in the paradoxical position of having potential liability to employees concurrently under two mutually exclusive remedies, with no resolution until there is a final adjudication in one or the other forum. The separate adjudicatory systems allow an injured employee to concurrently file a claim for workers’ compensation benefits as a land-based maritime worker and also to file a lawsuit under the Jones Act wherein he makes the contrary claim, i.e., that he is a crewmember of a vessel.