Friday, February 12, 2021

Dredging up the Real Exposure for a Dredging Company


The most common misconceptions when covering dredging company employees revolve around admiralty jurisdiction and Jones Act seaman status.

Many dredging companies, whose main operation is dredging on “navigable” waters, assume that admiralty coverage applies for all their exposures. However, admiralty coverage only covers those who have a substantial connection to a vessel (>30% of their time) AND are working on navigable waters.

If you are working on non-navigable waters (such as a land-locked lake) coverage flows to State Act Workers Compensation.

If working on or alongside navigable waters, but do not meet that 30% test, that will fall under Longshore.  This will most commonly happen for workers operating land-based equipment from the shore.

So, what about employees that work both on land, and on or from, vessels?  As an example, an employee primarily works on the dredge or towboat and performs landscaping work away from the water during the dredging off-season. This employee would be considered both a Jones Act seaman and would also have exposure under state act workers compensation.

Unfortunately, you cannot tack on P&I, MEL, or other marine policy coverage for these incidental exposures on land. You will most commonly need at least 2 different policies, one for the WC/Longshore and the other for the Admiralty exposures.

 The easiest way to cover the admiralty exposures is to provide a separate MEL policy or include crew coverage in the Protection and Indemnity policy.  Do however remember that a typical P&I policy only covers activities on owned/operated AND scheduled vessels.  If there is any work on/from non-owned vessels, MEL is a better solution.

Bottom line is for every dredging company you should have in force:

  • State Act WC
  • Longshore
  • MEL or Crew coverage in the P&I

We cannot tell the injured employee, or their attorney, where/how to bring a claim, so without ALL these coverages, you may well have a hole not only for benefits, but for possible defense coverage. Weirdly we have seen dredge employees file for Longshore even though in land-locked waters, and even though they were unsuccessful in obtaining those benefits, the “if any” Longshore endorsement on their WC policy provided unlimited defense cost coverage.


Learn more about this at Dredging up the Real Exposure webinar on February 18th, 11:30 am EST

Ian Greenway