It has finally happened. After 9 years Longshore reform has, at least in part, passed as part of the “Stimulus” package.
The change that passed amounted to a sentence or two out of the original six-page bill. Without the definitions and qualifications within the original bill, there are many questions. In addition, the immediate nature of the change left many scrambling for answers. Most of the answers available to date are collated in www.USLH.org including a simple matrix of who is and is not covered after the change.
In addition, we have updated www.LongshoreFactor.com to reflect the changes.
There is clearly more work to do… but this is a huge step forward for those who work repairing/servicing larger recreational vessels.
Why the stimulus bill? Whilst this was difficult to understand up front, it is now clear that this is the classic stimulus – it provides significant premium returns and savings in the LONGSHORE premium for the eligible employees. In fact Florida (which probably has the largest single number of eligible employers), will see savings of 55% of the Longshore premium for repair/service of recreational vessels. A significant amount in the pocket… even better, this is one of the few parts of the Stimulus Act that does not cost the American Taxpayer a dime. (Wish there were more?)
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So many Marine employers have now removed their significant exposure from LONGSHORE… but should they simply cancel LONGSHORE coverage? We say no.
Despite the change in the act, it is very dangerous to work without LONGSHORE coverage for three reasons:
1. You cannot take that great job on the commercial vessel when offered.
2. You will not have coverage for an attorney to defend you in the event one of you injured employees tries to challenge the change in the act and brings an action for LONGSHORE coverage.
3. You will not have defense costs OR coverage for an injured employee who tries to claim that the vessel they are working on was commercial in nature.
The good news is that virtually every LONGSHORE market out there is now offering an “incidental” LONGSHORE endorsement. The numbers vary from carrier to carrier, but most are looking at allocating a minimum of 1% of the payroll (ex sales/clerical) to Longshore subject to a $1,000 minimum. The better news is that this will only add a couple of hundred dollars or so to the bottom line of most policies and to me that is a bargain, even if it is only to provide the service of a specialty LONGSHORE attorney.
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