Wednesday, November 17, 2010

Longshore Rule Changes Deadline

The Department of Labor proposed rule changes to the Longshore act in response to the removal of the 65ft limitation for recreational marine repair/service business February 2009.

Full details of the proposed rule change can be found at
http://www.cftc.gov/ucm/groups/public/@lrfederalregister/documents/file/2010-20311a.pdf

We have analyzed these changes and have posted our position with the DOL as a formal comment. You can find a copy of our position paper and our proposal for a better rule at

http://resource.ligmarine.com/Proposed Longshore Rules 701.pdf

If you have comments for the DOL on these proposals, you need to submit them before the close of tomorrow, Thursday November 18th - the easiest way is through the website http://www.regulations.gov/search/Regs/home.html#home enter 1240-AA02 in the search box and “PROPOSED RULES” in the document type to locate the rule and submit your comments .

If you want to read comments that have been posted by others, change the document type to public submissions.

ACT NOW!

Tuesday, November 9, 2010

FLORIDA LONGSHORE RATES (again)

OK, change time again, effective January 1st 2011, the FLORIDA rate are changing yet again...

The Longshore load increased slightly from 1.19 to 1.23 for the "surcharged" rate group (surcharged classes are the typically DRY rate groups that have no specific Longshore code . . . carpenters, electricians etc. are classic examples). However, State rates on average went up 7.8%. Through some complex math that means the average Longshore rate for these "surcharged" classes will go up 7.94%. This will vary by class code.

The Natural Longshore codes (those that have a specific F code applicable) have also changed - here are some examples

 

July 2010

Jan 2011

Change

6824F Boat Building

11.73

10.44

-11.06

6872F Ship Repair                 

22.19

20.70

-6.7%

6006F Marine Contractors

12.06

13.35

+10.7%

7327F Stevedoring Containerized

19.34

23.01

+19.0%

These new rates apply only for risks that are new or renewing after January 1st 2010.

Clearly quite a mixed bag of rates… a 30% swing from the highest increase to the lowest reduction.

Thursday, November 4, 2010

Longshore & 3c

The out of state problem for Longshore has long been around but has recently been brought to the surface by new claims being denied.   Here's the situation in a nutshell.

  • Client is based in one state and that state is listed in 3A of the WC policy.
  • Client has all other states (except monopolistic) in 3c
  • Client has a Longshore endorsement with the 3A state listed
  • One of client’s employees goes to neighboring state for ONE DAY to do a Longshore job.
  • Claim is denied in that state:

WHY?  simple, but illogical.

The LONGSHORE endorsement only covers accidents in a state listed in the Longshore endorsement's schedule!    As the 3A state was not the location of the injury - no coverage.

This makes no sense - Longshore is federal coverage so why restrict it to a listed state...    but if you read the endorsement that is what it says and that is how it is being used today by certain carriers to deny claims.

The problem is increased when the carrier is a state fund, assigned risk, JUA or pseudo state fund as many of those are not ABLE to provide out of state coverages.

HOW TO SOLVE

  1. Add EVERY state the client could work in to the Longshore endorsement.   Usually free or low cost if added on an if any basis...   Problem:  many carriers cannot or will not do this.
  2. Add an other states LONGSHORE endorsement to the policy (only one or two carriers will do this) Problem: follows 3C so no coverage in monopolistic states.
  3. Add “ALL STATES" Longshore coverage - only one carrier will do, but great solution.
  4. Put your E&O carrier on speed dial...   if you don't take care of this by 1, 2 or 3 you WILL have the uncovered claim... the only questions is when.

Thursday, October 21, 2010

Longshore in Russia

A case a few years ago has recently come to my attention   Dennis Greenan vs Crowley Marine Service Inc  55134-5-I

Greenan worked to help offload a barge just off Sakhalin Island.   In case your geography, like mine, is pretty weak in the north Pacific, I researched online and it is “a large elongated island in the North Pacific, lying between 45°50' and 54°24' N. It is part of Russia and is its largest island”.

The Longshore act has long said that it applies in the “territorial waters of the United States” and whilst understandably it has been stretched to the high seas when sailing directly between two US ports, this is now the third, and most far reaching, opinion taking the Longshore act into foreign lands.  The first was Jamaica, the second the English Channel and now this third Russian Case.

There is little in the case to dispute that Mr. Greenan job was one that would have given him Longshore STATUS, but the SITUS (location) is a stretch in Russian Waters, in fact just off the beach.

Here is the big problem, in Webber v. SC Loveland, the case in Jamaica, whist the court extended benefits to Mr. Webber, they held that the insurance company did not have to pay as their policy specified the states where coverage was provided and clearly Jamaica was not one of them.

Worse, few carriers will provide Longshore outside the US, so now we are faced with an expansion of the territory, without any way to insure it in most case!

Watch this blog for more information, as it becomes available.

Thursday, October 14, 2010

Looking for Work?

The Insurance and Financial Management Branch Chief of the Longshore program in the Federal Department of Labor  is retiring at the end of 2010 and they are looking for a person with significant experience on the underwriting/broker (as opposed to only the claims) side of the industry to work in their D.C .office. 

The position is at the highest level of the federal general salary scale which ranges up to $155,000 and offers outstanding fringe benefits.  Although they seek a long-term employee, the position is open to those who may be ready to retire from the private insurance industry but seek a short term opportunity to continue to work, earning another small pension and life-long benefits. 

The person in the job oversees the regulation of the insurance industry, accepting, reviewing and acting on applications to participate in the system from insurance companies and self-insured employers.  The incumbent also manages the Longshore Special Fund, paying benefits directly to 5,000 beneficiaries and assessing participating companies for support of the Fund, managing an ongoing industry auditing contract, and participating in numerous policy decisions in the Longshore Division. 

The vacancy announcement is now posted through October 22, 2010 on the federal government’s job site, WWW.USAJOBS.GOV.  The posting number is DE-10-ESA-OW-126 and instructions for applicants are detailed at this site.  ACT FAST!

Saturday, July 24, 2010

Illegal Immigration and Longshore

Bollinger Shipyards, Inc. v Director, Office of Workers’ Compensation Programs,  the court considered whether Jorge Rodriguez, an undocumented immigrant was entitled to benefits under the Longshore and Harbor Workers’ Compensation Act (LHWCA).

The employer asserted that the injured worker was not entitled to benefits since his “injury caused him no loss of wage-earning capacity because he had no legal wage-earning capacity at the time he was injured.” The court disagreed and upheld the ALJ’s ruling-that Rodriguez was entitled to receive benefits under the LHWCA.

The court reasoned “The remedy provided by the LHWCA is merely a substitute for the negligence claim that an employee could otherwise bring against his employer in tort. As one court has observed, “it would not only be illogical but it would also serve no discernable purpose to accord illegal aliens the right to bring affirmative claims in tort for personal injury but deny them the right to pursue the substitutionary remedy for personal injuries sustained in the workplace.”

They granted Mr Rodrigues Longshore benefits and emphasized 1) Longshore is a non-discretionary remedy
2) Longshore was enacted as a substitute for tort claims, and
3) Longshoree xpressly provides for the award of benefits to nonresident aliens.

Saturday, July 17, 2010

Ferry Worker for State Transportation District Denied LHWCA Benefits

Gale Wheaton was a ferry repairman and mechanic for the Golden Gate Bridge, Highway & Transportation District (“District”) who suffered a back injury working aboard a vessel on navigable waters.

The ALJ found that the District was a subdivision of the State of California and therefore was excluded from coverage. On appeal the parties agreed that the District is not an arm of the state entitled to the protections of the Eleventh Amendment nor entitled to state sovereign immunity from federal claims. They also agree that, under California law, the District has the status of a local public agency such as a county or municipality.

In Tyndzik,v Director OWCP the 9th Circuit held the University of Guam was not a subdivision of a state under LONGSHORE. The University was created by the legislature, had a Board of Regents appointed by the legislature, and had a budget controlled by the legislature. However, it held the University was not a subdivision of Guam because the Guam government did not otherwise control the University, and the University could not perform basic government functions on its own, viz., take property by eminent domain, enact ordinances, or impose taxes.

The court upheld the ALJ’s determination, affirmed by the Board, that the District is a subdivision of the state as reasonable. And thus gave no cover under LONGSHORE due to the government exclusion.

Friday, July 9, 2010

The Power of the Ex Mod in Longshore

Experience modifiers and Longshore are a mystery to most.
Close to 2/3rds of the total Longshore payroll across the country is not reported to the rating authorities or counted in the experience mod. . . . How so? you ask.

The simplest example is California - WCRIB require the reporting of Longshore payroll and claims but DO NOT include it into the calculation of their mod. . . I have no idea why.

Also, look at the MUTUAL and SURPLUS LINES carriers that write LONGSHORE; best estimate is that between them they make up almost half the Longshore payroll (and claims) but do not report to NCCI.

It is absolutely worth the effort to correct this.

Filing the missing data with NCCI for a particular client recently dropped their mod from 1.10 to 0.75. They were insured by a carrier that does not report to NCCI for the LONGSHORE.

Not only did this save them some $50K or so on their state act premium this year, but it gave them a true mod to tell their customers. . . a very powerful message in today's competitive market. Last, but by no means least, the account suddenly becomes more attractive to new markets! Great effect for what was basically a bunch of paperwork.

Oh I forgot, the mod went down for 3 years, and save them well over $100K over the 3 years!

Tuesday, June 29, 2010

FLORIDA LONGSHORE RATES (again)

OK, change time again, effective July 1st 2010, the FLORIDA rate are changing yet again...

The Longshore load of 1.19 has NOT changed for the "surcharged" rate group (surcharged classes are the typically DRY rate groups that have no specific Longshore code . . . carpenters, electricians etc. are classic examples).

But that masks the real rate reductions as the base rates for Florida risks went down an average of 4.2% - so loading them 1.19  produces the same 4.2% reduction for the equivalent Longshore codes

The Natural Longshore codes (those that have a specific F code applicable) have also gone down - here are some examples

6824F Boat Buildings                                   Old 12.24 New 11.73

6872F Ship repair                                         Old 23.16 New 22.19

6006F Marine Contractors                       Old 12.58 New 12.06

7327F Stevedoring Containerized         Old 20.19 New 19.34

These new rates apply only for risks that are new or renewing after July 1st 2010

Oh well 1/1/2011 will soon be here... any guesses on the rates then?

Thursday, June 10, 2010

Cleanup Part Two?

According to Fox news, Foreign companies possessing some of the world’s most advanced oil skimming ships say they are being kept out of efforts to clean up the oil spill in the Gulf because of the Jones Act – But this time not the part that is used so often in Marine Insurance that allows injured seaman to sue, but the protectionist part of the law that requires vessels working in US waters be built in the US and be crewed by US workers.

Joseph Carafano of the Heritage Foundation has been studying the matter and wonders, “Are we accepting all the international assistance in the maritime domain that we can, and is the Jones Act an impediment to that?”

“Some of the best clean up ships – owned by Belgian, Dutch and the Norwegian firms are NOT being used” according to Coast Guard Lt. Commander, Chris O’Neil, because they do not meet “the operational requirements of the Unified Area Command.” One of those operational requirements is that vessels comply with the Jones Act.

"Yes, it does apply,” said O’Neil, “I have heard no discussions of waivers.”

Congress waived this part of the law after Katrina… is it time for another waiver?

For the full article go to http://liveshots.blogs.foxnews.com/2010/06/10/jones-act-slowing-oil-spill-cleanup/?test=latestnews

Saturday, June 5, 2010

Oil Spill Cleanup

There is no doubt that the cleanup work in the Gulf of Mexico will continue for months if not years and there are numerous businesses that are providing workers and/or equipment to help in the process. This posting serves to explain some of the issues in properly insuring these workers. I will break this down into Shoreline and Offshore/Vessel Based work.

SHORELINE
There are a limited number of carriers willing to look this exposure right now, especially for new clients and the approach can be different by carrier; most are rating all the shoreside exposure as Longshore (USL&H) and thus adding the appropriate Longshore class codes and endorsement to their policies.

In so far as classifications being used, again some will be different by carrier, the most common seem to be:

• 9402F - Cleaning rocks, sand or wildlife on the beach: rated as street cleaning

• 8602F Taking water or soil samples from the marshlands or the shoreline of the Gulf of Mexico (not from a boat) Geological Scout.

• Any other work to clean up after the oil spill: Use the class code that describes the work performed with the F surcharge added.

However be aware of multistate exposures, many of the carrier who can write this exposure are state specific carriers and their policies DO NOT AND CANNOT provide Longshore Insurance coverage in neighboring states.. So that cleanup worker working fully covered in Louisiana today, will work without coverage if they move to Mississippi tomorrow if with one of these carriers.

We would also STRONGLY recommend adding Outer Continental Shelf Lands Act (OCSLA) endorsement to ALL these operations.

OFFSHORE/VESSEL BASED
Work on/from vessels introduces another set of complications and need to be subdivided again into whether the vessels from are owned or chartered to their employer or not.

It is important here to remember that to qualify under Maritime Law (Jones Act etc) the employee must spend a “significant” portion of their time working from a vessel – the rule of thumb for most underwrites is 25%. Under that amount they will probably be considered Longshoreman. Nevertheless they should still be insured under P&I or MEL if only for defense costs.

OWNED/OPERATED VESSELS
Coverage here would be under the crew part of the vessels Protection and Indemnity (P&I) policy and should be added to this. Some underwriters may be reluctant to add this high hazard exposure and in that case you can look at either moving the Hull/P&I to someone who will OR simply using a separate MEL policy (see next section) to cover that part of the exposure.

OTHER PEOPLES VESSELS
This is typically covered under a Maritime Employers Liability (MEL) policy.
Some carriers can add the MEL to the WC/Longshore policy, but if you do that make sure the limit is $1mil as basic MEL only offers $25,000.
Alternately you can look at a monoline MEL policy, there you are often looking at a $25,000 minimum premium, a $10,000 or $25,000 deductible and a $1mil limit.For more information on MEL go to http://www.longshoretoolbox.com/Files/What_is_MEL.pdf

OTHER UNDERWRITING ISSUES• Clearly risks with a track history with the carrier OR in oil cleanup work (even if land based) are going to be much more acceptable. Build the credibility of your client with their detailed experience and background in cleanup work.

• Do not forget to add the MEL or P&I to your excess/umbrella coverage – the primary is likely to give you only $1mil limit.

• Occupational Disease is likely to be an issue for most underwriters and details of precautions taken might help. There have already been many reports of cleanup workers being taken to the hospital from this spill with a variety of symptoms and the litigation after the Exxon Valdiz spill went on for years.

• Contract details.. Most underwriters will want to see the details or headers in the contract under which they will be working… Who will they be contracting for? How long is the contract? Specific contractual requirements? Everyone understands that these contracts will probably be changed, renewed or extended, but clients without any contracts to offer will have a hard time obtaining coverage.

• What is the training/HAZMAT certification of the employees

• Do they have a drug free and safety program?

• Are the employees doing this work new hires? If so, what screening is there to ensure they can perform this long, hot, difficult work?

• If they are doing any vessel based work include details and sizes of the vessels from which they will work.

Clearly, the business that are new into this exposure will have to show more detailed plans to be successful in obtaining quality coverage from this limited market; even those with experience will need to build the detail. There is no question that this is high hazard work and proper affordable coverage is, in this case, more than ever built on quality, detailed submissions.

If you have clients that need this coverage send your submissions to SUBMIT@LIGMarine.com Questions? Send to ASK@LIGMarine.com

Friday, March 19, 2010

Longshore Blog Settings

Due to a small issue with our blog feed subscriptions all people who wish to continue to subscribe to the Longshore Blog should return to blog.LIGMarine.com and re-subscribe to the new feed address.

Sorry for the inconvenience.

-Mark