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 18^th - 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!

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.

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.

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.

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!

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.

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.