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.

Tuesday, September 8, 2015

Largest Pay Hike In Decades For ILWU Workers

The ILWU contends the following chart is misleading as it only looks at the most skilled union workers but it still reflects an amazing level of pay for a group that had their largest pay rises in years after successive labor disputes late last year.

Some job classifications guarantee 50 hours of pay each week for 40 hours of work. Marine clerks, steady foremen and steady crane drivers are guaranteed 50 hours of pay when they work 40 hours in a week, the report stated. About 30 percent of the ILWU work force was paid 2,600 or more hours in 2014, according to the PMA.   For more information see http://www.pmanet.org/the-ilwu-workforce

Wednesday, August 26, 2015

Florida 2016 WC Rates To Be Reduced

The Florida Office of Insurance Regulation said, August 21st  2015, that it has received the 2016 Florida workers’ compensation rate filing by NCCI which proposes a statewide average premium decrease of 2.2%

This includes a statewide average rate decrease of 1.9% and a reduction of the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160. The new rates would become effective Jan. 1, 2016.

We have yet to see a copy of the filing, but we are told this includes an average 7.7% reduction in the Longshore rates!  If true this could be quite significant!

Watch this space for more information as it develops.

Monday, July 27, 2015

City not immune to Jones Act

In the most recent instance of the Jones Act in the news, a NYPD counter-terrorism detective has filed a claim under the Act, claiming injuries that occurred during a rescue.  The $106 million lawsuit alleged the city failed to provide him with safe tools, equipment, and a “competent” crew of fellow officers. 

Under the Jones Act, the employer/employee relationship is spelled out to allow for recovery from personal injury claims due to the employer’s negligence.  The employee must also meet the requirement of spending at least 30% of his time in the service of said vessel or fleet of vessels on navigable waters. 

Here, the NYPD officer’s claims arise from the rescue of a capsized boat on the East river.  The officer was injured while pulling those in the capsized boat to safety.  As a member of the NYPD Harbor Unit, the officer will likely satisfy the requirement that he spend at least 30% of his time in the service of the fleet, even if it is not on a specific vessel.  

The damages can accumulate quickly and are often negotiated for when settling a case like the one mentioned above.  Permitted damages include: medical expense, pain and suffering, lost wages, loss of support to dependents or widow, loss of value of household services, and funeral services to name a few.   The suit alleges severe physical pain and mental anguish, including back and neck pain for which he seeks to recover.    

Thursday, June 18, 2015

Waveline 2015 - The State of the Marine & Longshore Market Report

St. Petersburg, Florida, June 18, 2015 – LIG Marine Managers announces the release of the new “Waveline 2015 - The State of the Marine & Longshore Market Report.”  Get your free copy now by clicking the link: WavelineUS.com!

The Waveline Market Report commissioned from LIG’s national survey in early 2015 is designed to gauge a fair representation of the true state of the Longshore and Marine Insurance Market. This survey measures the changes in Price and Availability of Longshore and Marine Insurance over calendar years 2014 versus 2013, includes projections for 2015, and provides comparisons with markets since 2006.

The “Waveline 2015 - The State of the Marine & Longshore Market Report” encompasses a fascinating overview of the State of the Market for Longshore, Blue Water, Brown Water, MEL, Cargo, MGL/SRL, Docks & Piers, Marinas & Boat Dealers, Yachts/Personal Boats & Charter Sightseeing Boats, Account Size Rate History, and Policy Delivery Time.

Get your copy of this valuable report at WavelineUS.com.

Friday, March 6, 2015

Large Vessel Longshore Requirement General Guide

Despite all the information and publicity, there is still a significant amount of confusion on who requires Longshore in the large/mega yacht repair/service market, particularly in South Florida.   The 2009 changes to the longshore act, were largely trumped by the 2012 regulations and whilst there are some minor difference this can serve as a general guide

People, repairing or servicing in ANY way any of the following types of vessels ARE Longshore
      o Skippered Charter boats of any size (from a “6-PACK” sport fisher to a super yacht that is chartered)
      o Bareboat charter boats if they have a capacity of 12 or more passengers
      o Commercial or Military vessels
      o They have a filed state act exception (they don’t apply to longshore)
      o They are an owner/operator
If any of these people do not carry Longshore coverage, the yard, marina or person that hired them would be responsible for their Longshore benefits EVEN IF the yard or marina does not have the coverage

There are slightly different rules for builders/manufacturers.

Need to know more?   See our Recreational Vessels and Longshore video at Recreational Vessels and Longshore Video

Thursday, February 26, 2015

YOU Are Invited!

By Karen Tischler, CMIP Education Events
February 24, 2015

Hey All Insurance Professionals!

Just wanted to invite you to our upcoming education event, the CMIP Insuring Waterfront Businesses Seminar, and for You CMIP Designation Graduates we are hosting a CMIP Graduate Seminar with Conferment Ceremony at this event!  The seminars will be held this April 20-21, 2015 at the Renaissance Ft. Lauderdale Cruise Port Hotel.

This dynamic Waterfront Business seminar delves deep into the exposures specific to waterfront businesses and provides practical “how to” guides on properly insuring them.  Topics include an in-depth overview of Marine General Liabilities, Third Party Liability for Marine Entities, Major Exclusions and Limitations from Non-Marine CGL Forms; Collision and Towers Liability Form including typical structures and E&O Issues due to Erosion of Limits; and concludes with the tricky issues of Care Custody and Control (CCC) Exposures including Ship Repairers Legal Liability, Terminal Operators Legal Liability, Stevedores Legal Liability, Wharfingers Legal Liability, Tankermans Legal Liability, and Charterers Legal Liability. Now that’s a lot of business knowledge packed into two days!

Graduates Courses are designed specifically for CMIP Graduates, providing them with an added depth understanding of these topics: Understanding Lloyd’s, Mutuals and P&I Clubs, Advanced Commercial Marine, Advanced Maritime Insurance.  In addition, Graduates have the option of attending any section of interest being presented at the "Insuring Waterfront Businesses Seminar” during this event.

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

Monday, February 23, 2015

Heart Condition Not Covered by Jones Act

William C. SKYE v. MAERSK LINE 2014 - William Skye, formerly the chief mate of the Sealand Pride, suffers from left ventricular hypertrophy, which he complained that his employer, Maersk Lines, caused when it saddled him with “excessive duties and duty time” such that he was “overworked to the point of fatigue.” At trial, the jury found Maersk liable and found damages of $2,362,299.  

Between 2000 and 2008, William Skye worked on the Sealand Pride as chief mate. Skye's job duties required him to work overtime, which adversely affected his health because of fatigue, stress, and lack of sleep. Skye regularly worked between 90 and 105 hours per week for 70 or 84 days at a time. At sea, Skye worked 12 hours; in port, he might have worked “round the clock.”

By 2008, Skye's cardiologist concluded that Skye's “continued physical stress related to his job, with long hours and lack of sleep” caused his labile hypertension—intermittent high blood pressure while on the job—which, in turn, caused his left ventricular hypertrophy.

The Jones Act does not allow seaman to recover for injuries caused by work-related stress because work-related stress is not a “physical peril, and as such the jury verdict was reversed on appeal and MAERSK were not found  NOT LIABLE.

Friday, February 13, 2015

Is this the Record Admiralty Award?

An oil rig worker won a $16.7 million final judgment issued Jan. 9, with $2 million in punitive damages and $162,600 in attorney fees.

George Tillman, had worked on an oil rig in the waters off Qatar when he allegedly contracted viral pneumonia, leading to multiple medical conditions, including blood clots and depression.

Tillman sued Hercules Offshore Services, his former employer, and its parent company under the Jones Act, & for Maintenance and Cure.  Tillman alleged that the rig on which he worked had unsanitary conditions and that those conditions led to his ailments.  Tillman’s claims against the corporate defendants included: negligence, unseaworthiness of vessel and failure to pay for a seaman’s maintenance and cure.

On Oct. 14, 2014, after a nearly three-week trial, the jury issued a $17.5 million verdict that included $6 million in damages for past and future mental anguish and the additional $2 million in punitive damages.  The judge, when calculating his final judgment, figured in salary offsets to defendants’ advantage that both sides had stipulated to during the trail.

Tuesday, January 6, 2015

John Chamberlin

I am sorry to report the passing of John Chamberlin, January 2nd 2015.    John was a  long time member of Signal Administration from its early years before moving on to a position in the Department of Labor’s longshore division in Washington.   He retired a few years ago but started his own consulting company.

I had the pleasure to work with John in all three of those positions, he was a true gentleman and always gave everyone a fair hearing.

He will be greatly missed.

-Ian Greenway