b'S ince returning from MariTrends in March, Ive met with PVAloading, unloading, repairing, dismantling, or building a vessel). As members up and down the West Coast, from Hawaii to Alaska.with the status test, there are exclusions and undefined terms that con-Regardless of the size, type, or geography of the operation, atinue to result in litigation and different interpretations, depending few things seem consistent. Demand is strong, and bookings are ap- upon jurisdiction. proaching (if not exceeding) pre-pandemic levels. Obviously, thats great news. People want to get back to in-person events with familyBut a few things are settled. USL&H is a federal workers compensa-and friends, enjoy a nice meal or a few drinks in a public space, and seetion program administered by the U.S. Department of Labor, unlike our beautiful waterways and scenic places from the vantage point onlyState Act workers compensation programs administered on a state-a passenger vessel can provide. But it isnt all good news, unfortunately.by-state basis. You can buy USL&H insurance on the private market, but companies offering this coverage must be DOL-approved and the Those very same operators also discussed the struggle to find and retainmarket is very concentrated with few players. If you choose to self-in-enough labor to satisfy the demand. For some, its finding qualified,sure this risk, that is also subject to DOL-approval. The majority of credentialed mariners. For others, its the lack of lower-wage, hourlyUSL&H risk in the United States is self-insured through one of a few workers. In some cases, its a matter of finding someone who can pass amutual associations. Regardless of whether you seek coverage through drug test, given the inconsistency between state and federal marijuanathe private market or the mutuals, theres typically a minimum pre-laws. For operators who may have sufficient crew right now, new vari- mium threshold of $10,000. For maritime employers that may have a ants and infections make it hard to keep crew healthy and reporting forvery limited USL&H exposure, this can be cost-prohibitive. While Im work, day in and day out.a firm believer in the ability of markets to address an economic need, this is an area where the market has failed the small maritime employer, As a risk management professional, Im always asking myself how I canat least in Washington state.best help my clients address their exposures. As vessel and associate members, Im sure you do the same. When it comes to employees andIn 1992, the Washington Legislature found the continued existence how best to cover them, the issue can be anything but straightforward.of a strong and healthy maritime industry in this state is threatened by For the workers in your retail shops or in the office, for example, youllthe unavailability and excessive cost of workers compensation cover-usually have State Act workers compensation insurance. Unless youage required by the United States longshoremans and harbor workers live in one of the four monopolistic states (like Washington, where Icompensation act. To remedy this, the Legislature established the live), youll buy that insurance in the private market. For your captains and crew, youll typically look to your Protection and Indemnity (P&I) policy for coverage. But what about the employees who are not consid-ered Jones Act seamen (and thus not covered under P&I) but may be- But what about the employees who come injured in the course of maritime employment over or adjacent to navigable waters? This is where USL&H insurance may come into play. are not considered Jones Act seamen (and thus not covered under P&I) Congress passed the Longshore and Harbor Workers Compensation Act (USL&H) in 1927, during the Progressive Era in which many pro- but may become injured in the tections were put in place for U.S. workers. Recall that just seven years earlier, Congress passed the Merchant Marine Act of 1920 (a.k.a. thecourse of maritime employment Jones Act), which provided protections for injured seamen. Though they provide similar protections, its important to note that USL&H over or adjacent to navigablespecifically excludes Jones Act seamen and those covered by State Act workers compensation. As its name suggests, USL&H was meant towaters? This is where USL&Hcover longshoremen, stevedores, and other shore-based employees likeinsurance may come into play.shipyard workers. Though it has been updated and amended several times, its far from settled. In general, there are two key tests to consider when evaluating a potential USL&H exposure.Washington Assigned Risk Plan (WARP) to make USL&H coverage The first relates to the status of the employee. Section 902(3) definesavailable for employers unable to purchase it through the voluntary an employee as any person engaged in maritime employment, in- private insurance market. The WARP program is authorized in statute cluding any longshoreman or other person engaged in longshoringby RCW 48.22.070 and Chapter 22 of Title of the Washington Ad-operations, and any harbor-worker including a ship repairman, ship- ministrative Code. A 13-member Board of Governors oversees the pro-builder, and ship-breaker Unfortunately, several of these termsgram and includes representatives of maritime employers, organized were left undefined and have been the subject of persistent litigationlabor, insurance companies, insurance brokers, and an obligatory seat over the years. This section also includes several exclusions that fur- for the Washington Department of Labor & Industries. Members ther muddy the waters. are appointed by the Office of the Insurance Commissioner to three-PHOTO: JAREDD CRAIG / UNSPLASHyear terms. WARP also employs an Executive Director and a General The second test is that of situs. Section 903(a) notes compensationCounsel to manage day-to-day operations. The Plan works with a ser-shall be payable under this [Act] in respect of disability or death ofvicing carrier to process applications, determine premiums based on an employee, but only if the disability or death results from an injuryclass codes and published rates, and to issue policies. occurring upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marineThe WARP Board meets quarterly, and all meetings are open to the railway, or other adjoining area customarily used by an employer inpublic. There is a robust process in place for reporting and adjudi-17 SEPTEMBER 2022'