Boat US Insurance-Longshore Liability Exclusion

[Berwick]

I just received my renewal policy from Geico/Boat US and noticed that it no longer provides liability coverage for Longshore and Harbor Workers' claims. This coverage was included on my last policy but is specifically excluded in section C-9 of the new policy. There was no notice of this change. I has to dig to find this out. I called and was informed it was a policy change and there is no option to ad the coverage. Did anyone else have this issue? Is this common on other policies? While unlikely, I am worried that I could be exposed to a 905b claim while in a shipyard. Thanks for any feedback.

 

[psneeld]

Hopefully Paul (Pau Hanna) can help....


Would normal liability take care of that issue?


Saw this tidbit on the web.... "Yes. You will need Longshore insurance for workers who perform any work on commercial vessels, even if most of their work is on recreational vessels. Only those workers who work exclusively on recreational vessels are not covered by the Act."

 

[Alaskan Sea-Duction]

Saving money a bad thing? I am not sure what this is. Funding the union?

 

[garbler]

It doesn’t surprise me that those ‘ Best Price ‘ marine underwriters would pull back on certain P&I coverages like the LHWCA. These used to fall under the heading of special endorsements for commercial fishing and yachts that penetrated a certain market value. If you dig into the case histories and coverage/claim details it will make your head spin, at least mine.

The Act as written was I believe targeted for losses and injuries not covered by the Jones Act but it seems like it has morphed and expanded in synch with the legal industry’s penchant for creative interpretation. So given the fact that defending a claim means Admiralty or Federal Court ($$$) I’m not least surprised it’s was withdrawn. These lightweight companies rarely if ever have this kind of legal expertise in house. So, sorry for the pun, this kind of coverage is out of their wheelhouse. If this is the case then of course they won’t write it no matter what you pay. If not already you’re going to see pollution endorsements dwindle or dropped like black mold in flood zones.

Ask around and find a full house marine underwriter with a menu and policy that fits you. You’ll pay a bit more but like they say you don’t know anything about your agent or the company until you file a claim. You should be able to set down with your agent and get real answers to any of your questions. If there is a loss the agent should be right alongside as your advocate with the company. He is working for you not the company. The agent gets paid out of your premium.

 

[BandB]

I'll be interested in Pau Hana's comments as well. A successful 905 (b) claim against a small boat owner would be extremely rare and difficult. The standard of proof of boat owner's liability is very high. However, that doesn't mean you can't be sued and incur significant legal fees. This is really a strange section of law and intended only to apply to larger boats and ships and only when the owner fails to exercise turnover duty by turning over a dangerous boat, active-control duty, by still doing something dangerous while boat in their care, or duty to intervene by not rectifying a known danger.

First, anyone covered by the act is unlikely to be involved with your boat. Second, unlikely to have a case against you.

What strikes me though is if the chance of a successful claim is minimal, then why remove the coverage.

I applaud you for checking your new policy against your old.

 

[BandB]

It doesn’t surprise me that those ‘ Best Price ‘ marine underwriters would pull back on certain P&I coverages like the LHWCA. These used to fall under the heading of special endorsements for commercial fishing and yachts that penetrated a certain market value. If you dig into the case histories and coverage/claim details it will make your head spin, at least mine.

The Act as written was I believe targeted for losses and injuries not covered by the Jones Act but it seems like it has morphed and expanded in synch with the legal industry’s penchant for creative interpretation. So given the fact that defending a claim means Admiralty or Federal Court ($$$) I’m not least surprised it’s was withdrawn. These lightweight companies rarely if ever have this kind of legal expertise in house. So, sorry for the pun, this kind of coverage is out of their wheelhouse. If this is the case then of course they won’t write it no matter what you pay. If not already you’re going to see pollution endorsements dwindle or dropped like black mold in flood zones.

Ask around and find a full house marine underwriter with a menu and policy that fits you. You’ll pay a bit more but like they say you don’t know anything about your agent or the company until you file a claim. You should be able to set down with your agent and get real answers to any of your questions. If there is a loss the agent should be right alongside as your advocate with the company. He is working for you not the company. The agent gets paid out of your premium.

You just called Geico a lightweight company unlikely to have the legal expertise?

While I agree with your endorsement of major marine underwriters and of independent brokers, this policy is definitely not coming from a lightweight or someone who doesn't write huge amounts of marine coverage.

 

[Berwick]

Thanks for the feed back. I agree that a potential LHWCA claim is rare, but I am more interested in the liability protection my policy provides for those rare events than the hull insurance. It is disappointing that they dropped the coverage without any notification. I am checking with other brokers for alternatives to Boat US/Geico, but with all the storm activity, I may not be able to bind anything before my current policy expires. I may be stuck for now...

 

[Pau Hana]

Greetings, all!

Happy Friday!

Just had a long chat with the folks at GEICO; the removal of LHWCA coverage by GEICO was made based on the definitions under Title 33 Chapter 18. From the DOL:

https://www.dol.gov/owcp/dlhwc/lsin...oyees may also,and their injuries occur there.

You need insurance if you are an employer with employees covered under the Longshore Act (LHWCA) and its extensions. The LHWCA covers employees in traditional maritime occupations such as longshore workers, ship-repairers, shipbuilders or ship-breakers, and harbor construction workers, but only if they are employed to work on the navigable waters of the United States or in the adjoining areas, including piers, docks, terminals, wharves, and those areas used in loading and unloading vessels. Non-maritime employees may also need to be covered if they perform their work on navigable water and their injuries occur there.

You do not require insurance for your employees if they fall under the following exclusions:

• Seamen (masters or members of a crew of any vessel);
• Employees of the United States government or of any state or foreign government;

The LHWCA also excludes the following individuals if they are covered by a state workers' compensation law:

• Individuals employed exclusively to perform office clerical, secretarial, security, or data processing work;
• Individuals employed by a club, camp, recreational operation, restaurant, museum, or retail outlet;
• Individuals employed by a marina and who are not engaged in construction, replacement, or expansion of such marina (except for routine maintenance);
• Individuals who (A) are employed by suppliers, transporters, or vendors, (B) are temporarily doing business on the premises of a maritime employer, and (C) are not engaged in work normally performed by employees of that employer covered under the Act;
• Aquaculture workers;
• Individuals employed to build any recreational vessel under sixty-five feet in length, or to repair any recreational vessel, or to dismantle any part of a recreational vessel in connection with the repair of such vessel;
• Small vessel workers if exempt by certification of the Secretary of Labor under certain conditions.

All states have workers' compensation laws, therefore the LHWCA coverage (by Federal definition) is excluded.

The section above in red is the part that would be of concern to recreational marine vessel owners- however, as there are workers comp coverage in all states, there is really no footing for a claim. That said, a lawsuit may be filed against you, but the bar is set very high and it's likely the lawsuit will not go anywhere.

 

[BandB]

The section above in red is the part that would be of concern to recreational marine vessel owners- however, as there are workers comp coverage in all states, there is really no footing for a claim. That said, a lawsuit may be filed against you, but the bar is set very high and it's likely the lawsuit will not go anywhere.

It is my understanding that suit against a third party can still be filed under 905 (b) but only can prevail if the shipowner is considered negligent and it requires proof of Duty, Breach, Injury and Causation. Reading websites of plaintiff's attorneys, they don't offer longshoremen a lot of hope in that regard. It does seem that Louisiana is the spot of the most filings.

 

[Joint Effort]

Boat US is now Geico. I am dealing with them on two of my boats at this time. HORRIBLE HORRIBLE HORROR. I will never deal with another company that does not have an address that I can't drive my truck through the front door. The absolute worse company I have ever dealt with. That is all I can say without poisoning my brain and heart to the point of suicide or a mass killing. Incompetence should be the name.

 

[Pau Hana]

It is my understanding that suit against a third party can still be filed under 905 (b) but only can prevail if the shipowner is considered negligent and it requires proof of Duty, Breach, Injury and Causation. Reading websites of plaintiff's attorneys, they don't offer longshoremen a lot of hope in that regard. It does seem that Louisiana is the spot of the most filings.

Correct, to the best of my knowledge. In my time at GEICO, I saw plenty of claims, but I cannot recall ever seeing or hearing of any claims or settlements regarding LHWCA coverage.

 

[garbler]

As a marine forensic expert ( retired ) but still hired occasionally by several marine underwriters and/or related parties , I can tell you it’s not all that difficult to file suit against these companies. You push the legal process to the courtroom steps and almost always there is a cash settlement. Insurance companies do not want to go to trial as their record of wins and losses is abysmal. Some states like CA, Fl, NY and MA are an impossible legal footing for anything but a slam dunk case, and even then most of the public/jurors harbor a resentment for the industry. You cannot set a 100% neutral jury when it comes to insurance.

I’ve been involved in cases where the suit was filed with several parties named but there were John Does 1 thru 10 left open by the attorney hoping to fill them in as the discovery phase develops. Most companies will play the game for a while but would rather push for a settlement and move on. Such behavior really only encourages these often frivolous suits. As a private boat owner without suitable coverage even a mistrial or dismissal will cost you a ton of money. Remember folks large yacht owners represent untapped funds to a hungry and resourceful attorney. Go find coverage.

 

[BandB]

Remember folks large yacht owners represent untapped funds to a hungry and resourceful attorney. Go find coverage.

But you just hit a key term there, large yacht owners. They would be far more likely to have risk to longshoremen than trawler owners. They are the ones who might have boats handled by longshoremen and the ones likely to be attractive targets.

 

[psneeld]

Boat US is now Geico. I am dealing with them on two of my boats at this time. HORRIBLE HORRIBLE HORROR. I will never deal with another company that does not have an address that I can't drive my truck through the front door. The absolute worse company I have ever dealt with. That is all I can say without poisoning my brain and heart to the point of suicide or a mass killing. Incompetence should be the name.

Maybe go through an independent broker...my experience with them has been quite pleasant and a breeze.

Had to switch to them because my last great marine insurance company offered NO insurance to keep a boat in Fl during hurricane season.

 

[garbler]

But you just hit a key term there, large yacht owners. They would be far more likely to have risk to longshoremen than trawler owners. They are the ones who might have boats handled by longshoremen and the ones likely to be attractive targets.

I understand and perhaps I was just assuming most boat owners on this site were running more tonnage. After going through the pages and pages of big gorgeous cruising boats in the ‘ interesting boats ‘ thread I probably just lost my senses of proportion. I spent my life working on them and for them but never could afford them.

Regards

 

[Alaskan Sea-Duction]

But you just hit a key term there, large yacht owners. They would be far more likely to have risk to longshoremen than trawler owners. They are the ones who might have boats handled by longshoremen and the ones likely to be attractive targets.

ASD is 48ft. There are folks out there that think I am a large yacht owner and thus rich......

 

[Berwick]

Thank you to Pau Hana for the very detailed reply. It makes me feel better about my situation. I can tell you that the people I talked to at Boat US and the email replies I received did not come close to explaining the decision to drop the coverage as you did. My main concern is a yard worker on the vessel being injured, and trying to assert a 905B claim against me since he would be limited to comp under state law. It looks like he would be barred from such a claim under your post. I wonder why Boat US/Geico dropped the coverage if there is no exposure though? As I stated in a previous post since I cannot get a new company to bind coverage with active storms I may be stuck with renewing with Boat US for now. Thanks again for such a detailed and informative response.

 

[Capt Ray]

Also left BoatUS-Geico

Boat US is now Geico. I am dealing with them on two of my boats at this time. HORRIBLE HORRIBLE HORROR. I will never deal with another company that does not have an address that I can't drive my truck through the front door. The absolute worse company I have ever dealt with. That is all I can say without poisoning my brain and heart to the point of suicide or a mass killing. Incompetence should be the name.

I also left Boat US Geico this year. I read in other periodicals that the "Agreed Value" type policy Boat US was famous for, was no longer "Agreed Value" for any claims that were not total loss claims. Partial Loss claims deducted depreciation. So for a 15-20+ year boat you really don't have an Agreed Value policy unless you boat gets totaled. BoatUS agent verified what I read. Hello Progressive!

 

[HONUHYC]

Don't confuse the issue of who is entitled to coverage under the act such that their employer needs this federal form of workers compensation insurance with the potential for these covered people to sue a vessel owner for negligence under section 905(b) of the Act. To be the target of such a suit you just have to be a vessel owner, To lose the suit, you have to have been negligent under the Act. Others have touched upon what the plaintiff has to prove and the defenses available to the vessel owner. I don't think I am going to have a claim, or breach a duty such that liability might arise, but I sure as Hell want my liability policy to protect me if a claim is filed. No coverage for 905(b) claims is a hole in the liability coverage that would not be acceptable to me. This is not legal advise, no attorney-client relationship is established hereby, consult your own attorney to understand the application of this law to your facts, yada yada...

 

[AdkChris]

You cannot set a 100% neutral jury when it comes to insurance.

Was there ever a 100% neutral law?

Seems to me most insurance laws are written by the insurance lobby or are approved by the insurance lobby before they ever go up for vote.

There should be neutral laws and juries but lets look at both sides.

 

[Pau Hana]

I also left Boat US Geico this year. I read in other periodicals that the "Agreed Value" type policy Boat US was famous for, was no longer "Agreed Value" for any claims that were not total loss claims. Partial Loss claims deducted depreciation. So for a 15-20+ year boat you really don't have an Agreed Value policy unless you boat gets totaled. BoatUS agent verified what I read. Hello Progressive!

Hate to burst your bubble- but just about all policies (especially Progressive) depreciate partial losses after a set number of years (less items listed in the policy form).

Been that way for years.

 

[Alaskan Sea-Duction]

Bottomline: If I have a claim, how am I treated by the insurance company and my boat repaired.

I then look at how that matches with what my broker told me.

 

[BandB]

Hate to burst your bubble- but just about all policies (especially Progressive) depreciate partial losses after a set number of years (less items listed in the policy form).

Been that way for years.

And it's not just marine insurance. Other policies handle it differently but all have some aspects that say you don't get what you might want. Auto policies that don't replace with OEM parts. I once had a co-worker furious because she'd had a pipe burst in her home and she'd gone cheap on homeowners insurance. On the pipe, they would only patch in a small new section, not even a full replacement of the pipe, but the carpet was what really got her as that's when she found out she had depreciated value. Carpet was 5 years old and they paid her only 20%. Very costly lesson. Read your policies and decide if you're comfortable.

 

[sascudder]

There is a caveat to the longshore/state workers' compensation coverage issue however. I speak of NC workers' compensation law here, but it is similar in other states. Only employers having three or more employees in NC have to have wc coverage, so if you have a guy operating as a sole proprietor working on your boat (your diver or the guy working out of his van) you could now be uncovered for longshore and wc and the worker could sue you for negligence if injured on your boat. Note that if the sole proprietor (owner) has two guys working for him, the owner does not count as one of the three, so the workers still could be uninsured.

In NC, for a premises owner to be liable (negligent) there has to be a latent danger of which the owner was aware, but did not warn about (such as the decks are rotten, but look fine on the outside and the worker falls through and is injured). Open and obvious dangers equally known to the worker (the decks were wet, the worker knew it, but slipped and was injured) are not actionable. This may be different in other states, as NC does not have comparative fault, but is still one of the few with strict contributory negligence.

All of this is to tell you that if you are having work done on your boat by hired help, do think that they will be covered by wc insurance. If it is an individual or small company working on your boat, there is a good chance of no wc coverage and you can be sued if
they think they can prove negligence. It is not out of line to ask to see an insurance certificate for the people you hire.

 

[slowgoesit]

You cannot set a 100% neutral jury when it comes to insurance.

Was there ever a 100% neutral law?

Seems to me most insurance laws are written by the insurance lobby or are approved by the insurance lobby before they ever go up for vote.

There should be neutral laws and juries but lets look at both sides.

AdkChris, garbler stated "100% neutral jury", NOT "100% neutral law"

 

[BandB]

There is a caveat to the longshore/state workers' compensation coverage issue however. I speak of NC workers' compensation law here, but it is similar in other states. Only employers having three or more employees in NC have to have wc coverage, so if you have a guy operating as a sole proprietor working on your boat (your diver or the guy working out of his van) you could now be uncovered for longshore and wc and the worker could sue you for negligence if injured on your boat. Note that if the sole proprietor (owner) has two guys working for him, the owner does not count as one of the three, so the workers still could be uninsured.

In NC, for a premises owner to be liable (negligent) there has to be a latent danger of which the owner was aware, but did not warn about (such as the decks are rotten, but look fine on the outside and the worker falls through and is injured). Open and obvious dangers equally known to the worker (the decks were wet, the worker knew it, but slipped and was injured) are not actionable. This may be different in other states, as NC does not have comparative fault, but is still one of the few with strict contributory negligence.

All of this is to tell you that if you are having work done on your boat by hired help, do think that they will be covered by wc insurance. If it is an individual or small company working on your boat, there is a good chance of no wc coverage and you can be sued if
they think they can prove negligence. It is not out of line to ask to see an insurance certificate for the people you hire.

Not out of line to ask for proof of bonding and insurance.

One thing most don't realize about workers' compensation is that it didn't develop to protect employees. Instead it originated to protect employers by putting limitations on the liability.

While every state is different, most are going to give any benefit of doubt to the employee. The burden of proof shifts to the employer. In fact a couple of states even have it in their code that if there's doubt give the benefit to the employee.

 

[Jgutten]

I spent 40 yrs in the Aviation Insurance business and we had the same exclusion on Aviation policies. Think of it this way. The Longshoreman's Act is workers compensation for Marine workers.

You cannot use your Marine Policy to fulfill your requirement to provide insurance for your workers, in this case, employees who need to be covered under the LHWA. If you need to provide this coverage, there is an insurance market which sells this coverage and has all the approved forms to provide it.

For cruisers, this is not an issue at all.