Distinguishing claims that fall under the Longshore & Harbor Workers’ Compensation Act (LHWCA) and the Jones Act can be difficult, said Jack Martone, senior vice president of American Equity Underwriters.
Martone discussed the two maritime coverages at the April Risk and Insurance Management Society national conference held in Denver, Colorado.
Though the LHWCA expressly excludes Jones Act seamen from coverage and only covers crew members of vessels, courts continue to insist that workers can qualify under both laws.
The LHWCA is a federal law passed in 1927 that was enacted to provide workers’ compensation coverage to land-based maritime workers.
There can be an overlap in coverage in some states where workers can be covered under both the LHWCA and the state’s workers’ compensation system.
There is an occupational test for the LHWCA that contains status and situs requirements. A worker must meet both requirements separately for coverage to apply. Status means an employee like a maintenance worker or a contractor who is engaged in maritime employment (a phrase not defined).
There are three ways a worker can meet the situs requirement. If the worker was:
- Injured over U.S. water/drybed;
- Injured on enumerated site, pier or wharf;
- Injured on other adjoined area customarily used by employer.
The Jones Act, on the other hand, is a cabotage law and liability remedy. Cabotage is defined as the carrying of goods – including people – from one place to another. It applies to U.S. navigable waters and the outer continental shelf.
To qualify under the Jones Act, the injury must have occurred to a crewmember on a covered vessel and in the course of established employment.
It specifically applies to U.S. citizens, Martone said, though a worker could apply for coverage if he or she doesn’t have an adequate remedy under their own country’s law.
A crewmember can allege unseaworthiness, demand maintenance and cure and still make a negligence claim against their employer. Martone said the potential recovery under the Jones Act can far exceed the limit of workers’ compensation benefits offered under the LHWCA.
Liability coverage under the Jones Act is covered by a vessel owner’s protection and indemnity policy or by adding a maritime coverage endorsement to an existing workers’ compensation and employer liability policy. A marine liability endorsement can also be added to a commercial general liability policy.
An employer can get credit for a Jones Act settlement against LHWCA section 9032.
Besides the Jones Act and the LHWCA, adjusters should be aware of other potential coverages that could be applicable to workers. These include the Defense Base Act and the Outer Continental Shelf Lands Act.
Adjusters seeking additional information can visit The American Equity Underwriters, Inc. Longshore Blog at http://amequity.wordpress.com/ to explore coverage topics in depth.