Thursday, August 25, 2022

Nuclear Verdicts and The Rising Costs of Maritime Claims

Many of you are aware of the term Nuclear Verdicts, which refers to cases in which a plaintiff is awarded what is considered an excessive dollar amount. This trend of exceptionally high jury awards has significantly impacted virtually every industry in recent years. Marine is suffering more than most.

The escalation of both the frequency and severity of these claims is amazing over the last 2-3 years and seems to have no signs of abating.

The excess market has suffered more from these losses with the effective erosion of the lower layers and the higher limit claims. It’s difficult to see how the excess market can survive if these trends continue without significant price changes.

Here are a handful of examples of lawsuits that we’ve seen in the last few years in the Marine Industry where jury awards or settlements have been quite significant.

I am sure many of you have other examples.  Please share in the comments or send them to ASK@LIGMarine.com, and we will include them in a future post.

Ian Greenway

Thursday, April 7, 2022

Marine Applications Reinvented

Traditional monoline marine insurance applications can be frustrating because they require repeat entry of common data. When quoting a marine package using one of these applications, you're asked to provide the address, years in business, description of operations, and other basic information on a single account multiple times. This can be very time-consuming for busy agents.  

At LIG, we've developed a new approach to applications. Our Commercial Marine General Application allows us to collect all the general data for a specific account just once. In addition, we've been able to reduce most of the supplements to just one or two pages, vastly reducing the time and work needed to prepare a comprehensive submission for a marine package.

To make submissions as convenient as possible, we've made our Commercial Marine General Application and the supplements you need for each line available 24/7/365 online at https://ligmarine.com/Apps/Printable.

  • Commercial General Application
  • Boat Manufacturers Supplement
  • Commercial Vessel Supplement
  • Diving Supplement
  • Equipment Supplement
  • Marine General Liability Supplement
  • Marine Umbrella Supplement
  • Oil Pollution Liability Supplement
  • P&I Supplement
  • Terminal Operators Liability Supplement
  • Wharfingers Supplement

If you are not actively involved in Commercial Marine and need to identify the lines of coverage you need, use our simple tool MARCOVER at LIGMarine.com/MarCover and then access the apps you need at https://ligmarine.com/Apps/Printable.

When your submission is ready, just email it to SUBMIT@LIGMarine.com and one of our underwriters will be assigned to walk you through the process.

For questions or support, please email us at ASK@LIGMarine.com.  

Tuesday, February 1, 2022

Proposed New Coverage Requirements for Fisheries Observers

For many years the National Marine Fisheries Service (NMFS) has been working to align the insurance coverage requirements for Fishery Observers across its various regions and to supply a set of attainable requirements. 

  

This culminated with an Observer Provider Insurance Workshop on election day 2016 in Washington DC. I was fortunate enough to be invited to this 2-day workshop to discuss this topic with fellow industry representatives.

     

National Marine Fisheries Service, also known as NOAA Fisheries, is an office of the National Oceanic and Atmospheric Administration within the Department of Commerce. The organization is tasked with overseeing the various fishery observer programs designed to protect and monitor fisheries across the US. Their National Observer Program "Allows NOAA Fisheries to address observer issues of national importance and develop overarching policies and procedures that reflect the diverse needs of regional observer programs."


Their goal has been to establish uniform, nationally consistent minimum insurance requirements that would apply to all their observer programs and would:

  • Specify authorized observer provider companies’ responsibilities as the observer employer.  
  • Provide regionally consistent insurance requirements through national minimum standards. 
  • Offer an insurance suite that better addresses the risks observers, their employers, and vessels may face with observer deployments.
  • Minimize the regulatory burden through the removal of redundancy and unnecessary requirements.
  • Clarify the applicability of statutory and common law authorities to observers, whether deployed at sea or shoreside.

Finally, a little over five years after that workshop, they have published a proposed rule. You can find the detail of the proposed rule here in the federal register.


What’s my take on their proposal? The concept makes a lot of sense, but some of the terminology and coverages do not reflect the actual policies available to address the coverage of an Observer.
I have posted my comments and suggestions to their response site to provide one clear set of national insurance requirements. You may also download my response here.


Ian Greenway

Tuesday, January 4, 2022

Longshore Act’s Recreational Vessel Exclusion Only Applies Where State Compensation Law is Available

In a recent Longshore case, Brizo LLC v. Carbajal, the United States Court of Appeals for the Eleventh Circuit analyzed the recreational vessel exclusion of the Longshore Act.

The Longshore Act excludes from its coverage “individuals employed to build any recreational vessel under sixty-five feet in length, or individuals employed to repair any recreational vessel or to dismantle any part of a recreational vessel in connection with the repair of such vessel”, only if such employees are afforded coverage under an applicable state workers’ compensation statute. 

While cleaning the hull of a yacht, a commercial diver, Luis Gorgonio Ixba, was killed when a vessel crew member engaged the bow thrusters. Ixba arrived but failed to inform anyone on the vessel of his arrival and immediately began his dive. He failed to deploy the diving flag, the purpose of which is to indicate to those on the surface that a diver is down.

The Chief Mate needed to move the vessel closer to the dock to load jet skis. Before engaging the bow thrusters, the Chief Mate checked for bubbles but saw none. 

The personal representatives filed a wrongful death suit in Florida state court. The trial court granted summary judgment for the vessel owner and held that the Decedent was an employee covered by the Longshore Act.

The Court addressed whether the vessel was exempt from the Longshore Act on appeal. It was undisputed that the Decedent diver was injured on “navigable waters”, satisfying situs. Based on prior precedent, a commercial diver commissioned to scrape barnacles from the hull of a docked vessel satisfies the status test. Again, arguing that the Longshore Act does not apply, Decedent’s personal representatives argued “recreational vessels” are exempt from the Longshore Act.  The vessel owner argued the portion of that statute omitted from Decedent’s argument; that the exclusion only applies to employees working on recreational vessels only “if [they] are subject to coverage under a State workers’ compensation law.”

The Court held that there was no evidence or argument from Decedent that state worker’s compensation law covers the claim. However, the Court did note that Decedent’s Employer stated in a sworn interrogatory response that Decedent actually “was a Truly Self-Employed Independent Contractor with no Controlling Employer.”  The Court concluded that Florida workers compensation law excludes independent contractors not engaged in the construction industry from its coverage. Accordingly, the Decedent could not be covered by state law. Thus, the recreational vessel exclusion is inapplicable, and the Longshore Act is applicable.

This exclusionary wording has been in the Longshore act for nearly 30 years. Still, this case illustrates how it will be interpreted and used as a precedent for future claims in recreational marine, especially for independent contractors. 


Ian Greenway