Wednesday, January 18, 2017

Caribbean Vessel Insurance

Approximately 90% of the world’s Protection & Indemnity insurance premium is written by the P&I Mutuals, or “Clubs” as they are known and most of those have a common anniversary date of 20th February.   So, we are heading rapidly towards that date in 2017.

Whilst there is no requirement for their “sister” Hull policies to have the same effective date, many follow either with the same Feb 20th date or with March 1st, so the market is in full swing right now.

The scary part of this market is how just one change of a number in a Hull policy wording can create a huge divergence in the event of a claim.  Hull policy forms are cloaked in mysterious form names: “CL280", “CL284" or the notorious “CL289".  These titles mean little to most ship owners and even to most insurance agents (except for a few specialist commercial marine agents) and yet their differences can be enormous.  Take for example the term “F.P.A.”, a very common marine insurance abbreviation, meaning "Free of Particular Average".  That cleared it right up, didn’t it???
 "F.P.A." simply translated means that the only time the insurance company is going to pay a claim is in the event of a total vessel loss.  “Particular Average” means a partial loss; “Free of” means it is not covered! So, that $500,000 loss due to a fire on your $1,000,000 ship is not covered! Shock!! Gasp!!  Find out up-front, exactly what is or is not covered.  Often, a few extra dollars of premium (and sometimes no extra cost) will bring you a lot more coverage, just for the asking!

Sometimes a subtle but critical variance in the name of an insurance company can make a huge difference when you push on the policy with a claim.   More terrifying is how frequently we find that the shipowner or their broker/agent only find this out when the claim happens, particularly in the Caribbean market.

In our report “The Critical Flaws in Shipowners Insurance”, we highlight not just these two, but 5 other business ending flaws in shipowners coverage, particularly targeting the more “mature” vessel that trades either in the Caribbean or between the US and the Caribbean.

With the beginning of the opening of Cuba, this becomes even more important as trading opportunities become available there.

Just go to to download a free copy of this report.

Happy and Claim Free Sailing!

Tuesday, November 8, 2016

The Hidden News for Florida Longshore Employers

Florida Workers’ Compensation rates will rise by an average of 14.35% effective December 1st and the industry has covered the impact of that on the “dry” businesses in Florida.  But the news for Employers with Longshore exposure is buried in the detail of the new filing.


For risks that fall into the “non-traditional” Longshore world – e.g. a risk that does electrical work in a Longshore environment – there is some good news!  Even though the “DRY” or State Act rate may have gone up an average of 14.35%, the new Longshore load has been reduced from 1.20 to .92!  That means that instead of multiplying the state rate by 2.20 you now multiply it by 1.92.
The math on this is a little complex, but the bottom line is that the effective Longshore rate for those codes will DROP a hair… 0.2% -- not much, but DOWN not UP!


The average rate increase for the “traditional” Longshore classes is increasing 3% over the January 1, 2016 rates.   There is a long and even more complex explanation as to why these rates are increasing, but bottom line is the increase is a modest 3% rather than the 14.5% for their “dry” counterparts
Some of the more common classes and rate comparisons are:

2015 Rate
2016 Rate
% Difference
6006F – Marine Const.
6824F – Boat Building
6872F – Ship Repair
7317F – Stevedoring
8726F – Steamship Line

 These new rates will apply only on risks that are new or renewing after December 1, 2016. 
The bottom line is that whilst the “dry” business are going to be hit heavily with rate increases as the policies renew, the effect on Longshore business is going to be modest.

Keep Calm and Carry On; seems to be a good motto for this change in the marine world!

Friday, October 28, 2016


LIG Marine Managers is delighted to announce that we have been registered as Lloyd’s brokers. This expands further our role from being Lloyd’s coverholder and allows us to place business directly with Lloyd’s Underwriters.   Our Lloyd’s broker registration is LIG 1586.

Ian Greenway, President and CEO of LIG commented “This is a significant step in our relationship with Lloyd’s which started when we opened our doors and allows us direct access to the home of Marine Insurance”

Mark Greenway, London Market Director of LIG added “We have had our own London office since we were approved by the FCA (then FSA) in 2005 and that has only strengthened our relationships with our Lloyd’s underwriters. This registration will allow us to utilize the ability of Lloyd’s underwriters to make decisions and design custom solutions for our agents and clients”

About LIG Marine Managers
LIG Marine Managers is the leading provider of Commercial Marine and Longshore Insurance solutions to independent agencies throughout the USA and Caribbean since 1989. If you would like more information about this topic, please contact Ian Greenway or Mark Greenway at: or  or call 727-578-2800

Thursday, August 18, 2016

Department of Labor Raises Penalty for late filing of the LS202 and other forms

As of August 1, 2016, new maximum civil penalties are in place according to the U.S. Department of Labor.   Announced June 30, 2016, the US Department of Labor unveiled an interim final rule showcasing an increase in civil penalties that can lead to additional penalties under the Longshore & Harbor workers Compensation Act (USL&H), and its extensions the Defense Base Act (DBA), the Outer Continental Shelf Lands Act (OCSLA), and non appropriated Fund Instrumentalities Act (NAFIA).

These penalties were exempt from the prior inflation adjustment act, so the agency’s penalties have not increased since 1990. By applying the 2015 Inflation Adjustment Act for the first time, Congress effectively directed DOL to account for more than 35 years of missed inflation adjustments in one step. Accordingly, adjusting for inflation now results in a substantial increase in one step!

There were even additional adjustments for USL&H penalties as they have not been keeping pace with inflation.  This means that the new civil penalty for “Failure to file first report of injury or filing a false statement or misrepresentation in first report”, the LS202, is now set at a maximum of $22,587!

Wednesday, April 13, 2016

Are You Hiring Your Next Big Claim?

Waterfront employers have a significant disadvantage when hiring.  Delivered by an obscure rule in the Longshore Act referred to as the “last responsible maritime employer”.

Dating back to 1955, the rule makes the last Maritime Employer who exposes and employee to a particular “injurious stimuli” responsible for all the employee’s injuries.  When stated simply, that does not sound too bad.  But, suppose you hire someone who has worked in a noisy environment for many years, and then works for you for a week.  Even if the environment is less noisy, his claim for hearing loss would be yours completely!  Add to that, even if the employee then goes to work on a land based job, the emphasis switches to the word “Maritime” and even then, the claim remains yours. 

Even scarier is the cumulative soft tissue injury!  Even if the job is more sedentary!

So how do you overcome this?  These few simple steps will help:

  • Start with a Job Description – If you do not have time to write one from scratch, there are many good templates offered through the Trade Associations or online that you can easily customize.  The physical needs of that job must be included.  Things like:
    • Must be able to lift 25lbs
    • Job will require long periods of standing…(Be careful to follow ADA rules.  Use one of the online guides or an attorney)
  • Make sure the applicant has had a chance to review the Job Description.  Then a great question is, “Is there anything that would stop you from performing the job described?” a simple yes or no question.
  • A post offer, pre-start medical evaluation really helps.  The key here is to find a doctor who will test to the physical requirements of the position.  These simple steps are a minimal cost to help protect against a huge long term claim potential.

The more new hires, the more this problem multiplies. 

This advice is of course not legal advice.  You should always consult an experienced attorney who can review your particular circumstances and the Federal, State, and local laws applicable to your business, and provide you specific guidance before implementing any such programs.

You want qualified, experienced employees, they can be a tremendous asset to your business.  But, do not also let them be your next big claim, especially when it does not really even belong to you!

Monday, February 8, 2016

CMIP Invitation to Insuring Marine Employers

YOU Are Invited!

Hey All Insurance Professionals!

Just wanted to invite you to our upcoming education event, the CMIP Insuring Marine Employees Seminar!  The seminar will be held this March 14-15, 2016 at the Renaissance Tampa International Plaza Hotel in Tampa Florida.

The Insuring Marine Employees seminar delves deep into the exposures specific to Longshore and Workers Compensation, the regulations that define them, and where there are cross-overs that can cause unexpected exposures.  You will also receive practical “how to” guides on properly insuring them. 

Topics include an in-depth overview of Marine Employees Exposures with analysis of the State Act Workers Compensation, Longshore & Harbor Workers Compensation Act, Outer Continental Shelf Lands Act, and Admiralty Liabilities to Employees; Insurance Policies & Programs will focus on Workers Compensation, Longshore and OCSLA, Maritime Employers Liability, and Protection and Indemnity; and it concludes with the tricky issues of Payroll Allocation, Officer & Owner Exclusions, Modifiers, Auditing Techniques, and the Typical Structure Review.  Now that’s a lot of business knowledge packed into two days!

This dynamic seminar event is a great opportunity to broadening your expertise and network with others in your industry, as insurance professionals from all levels, Agents, Underwriters, Human Resources, Administrative, and Management will be in attendance!

Visit to register; don’t delay as Group Rates fill fast and Early Bird Registration ends soon!  We look forward to welcoming you at this education event!  See you there!

Tuesday, December 1, 2015

Disclose or Risk Marine Insurance Coverage

Recently, the US Court of Appeals for the Eighth Circuit reviewed a case on appeals regarding the necessity to act with the utmost good faith, also known as the uberrimae fidei defense.  In the matter of St. Paul Fire & Marine Insurance Co. v. Abhe & Svoboda Inc., the court found the insured withheld relevant information, which called into question the vessels prior claims of being seaworthy and watertight.  After the insured barge sank in Narragansett Bay, an investigation by St Paul Fire & Marine Insurance Company revealed a survey in November 2010 had been done which showed the barge had pinholes in the deck and the barge was not watertight. The submitted application from the insured used a different application dated from May 2010.  St Paul Fire & Marine Insurance Company raised the defense of uberrimae fidei, stating that failure to disclose the survey breached the duty to act in good faith and withholding the relevant information affected the issuance of the marine insurance policy.  

Under a defense of uberrimae fidei, both the insured and marine insurer have a duty to act in the utmost good faith when dealing in matters of marine insurance. The court held the insurer must demonstrate reliance the information that was withheld to void a policy.  In this instance, the information withheld from the insurer was vital to the issuance of the marine insurance policy. Failure to disclose a prior survey that showed the vessel might not be as watertight as previously thought breaches that duty to act in good faith, as the policy would not have been issued had the contents of the prior survey been known.

Additionally, the court held that Marine insurance coverage requires that all relevant information to the policy be disclosed at the time the policy is created.  Failure of the client to provide this information is grounds for a denial of claim.  Again, in this instance the insured failed to provide information to the provider of marine insurance, which would have had a direct impact on the insurers knowledge of risk associated with underwriting the vessel.  The burden of the relevance of the information rests in the hands of the insurer, but the information does not need to be requested specifically from the insuring agent or company.  The full and open disclosure by the insured is expected under the uberrimae fidei doctrine, which outlines that that both parties should deal in good faith.  Failure to act in good faith is frowned upon by the courts, as the eighth district demonstrated in the recent ruling.  Again, the court holds the failure to request specific information by the insurer does not relieve insurer of liability, the information must be provided regardless of whether the a specific inquiry was made.

To avoid a denial of claim, all information relevant to the marine liability insurance policy must be provided to the insurer.  The consumer is protected as well, as the insurer has the duty to review the information and make the determination that it was actually material to the issuance of the policy.  Simply ask, would the policy have been issued given the withheld information?  If the answer is yes, the policy would have been issued and should not be found void, and the insurer has not passed their burden as outlined by the eighth district.  Without a reliance that we all deal in good faith uncertainty and costs will increase.  This is a wake up call for both sides of the marine insurance business.  It is important to note that good faith and fair dealings are crucial to a thriving industry.