b'LICENSEBUSINESSINSURANCE: WHAT Is It andWHO Does It Benefit?BY RANDY ONEILL // LANCER INSURANCE COMPANYM arinelicenseinsuranceisapre-paidlegaldefenseinsuranceThis article sheds light on where, in the event of an incident, a vessel policythatprovidespolicyholderswithlegalrepresentationowners liability insurance may work to defend the vessels captain and by a local maritime attorney in the event of a covered shippingwhere there is a need for the captain to obtain his/her own separate counsel. casualty or incident. This coverage is designed specifically to protectAn excerpt from maritime attorney James E. Mercante and his associate the licenses and livelihoods of professional mariners, such as U.S. CoastKristin E. Poling from their Tulane Maritime Law Journal article, Soup Guard-licensed deck and engineering officers and certified tankermento Nuts: Navigating [National Transportation Safety Board] NTSB Marine serving aboard all types of passenger vessels operating in U.S. waters.Casualty Investigation may explain why having marine license insurance can be an asset. WHAT TYPES OF EVENTS ARE COVERED BY LICENSE INSURANCE? Often times, the vessel owners attorney will act on behalf of the vessel Typically, the types of events covered by license insurance are shippingcaptain in an investigation; however, there can come a point when the casualties and incidents triggering a Coast Guard investigation. Theseowners defense against liability is in conflict with that of an officer, investigations can result in negligence charges against involved officersMercanteandPolingwroteinJuly2019.Thistypicallyariseswhere who can face suspension or revocation of their license(s). These casualtiesa vessel owner seeks to limit its liability under the Federal Limitation of include, but are not limited to: accidental strandings, sinkings, fires/ LiabilityActbyattemptingtoestablishthattheyhadnoprivityor explosions,collisions,allisions,oilproductspills,groundings,heavyknowledge as to the cause of the accident. When the owners interests weather damage and wake damage.are at odds with a shipboard employee, it may become necessary for the employee to obtain separate counsel. Specifically, when the investigation WHY CONSIDER LICENSE INSURANCE COVERAGE? or circumstances suggest that there is a chance for criminal or other civil The majority of marine license insurance claims minimally involve: anliability or penalties directly against an officer (i.e., a Coast Guard license accidentsceneinvestigation,includinganinformalCoastGuardSuspension or Revocation (SAR) action), the vessel owners insurer may interview;therequirementtocompleteandsubmita2692Marinenothaveanobligationtoprotectorindemnifythatofficer.Thiswill Casualty Report by the involved mariner; a subsequent formal Coastgenerate an insurance coverage issue to be evaluated under the terms of GuardinterviewatthelocalMarineSafetyOffice;and,ifcharged,the P&I policy. However, the ships officer may have a separate policy of potential lengthy proceedings in administrative court.insurance issued by a license insurer.If paying out of his/her own pocket, the affected mariner can incur legalMercante and Poling went on to state that license insurance is specifically bills of $300-350 per hour for the duration of the process. Conversely, ifdesigned to pay the cost of attorneys fees to defend a licensed officer (i.e., the mariner has his/her own or employer-provided license insurance, theengineer, captain, mate, pilot) in a Coast Guard casualty investigation, annual premium (i.e., $450-500) is less than two hours of legal fees andincluding SAR proceedings, or in an NTSB investigation. Importantly, provides fully-paid defense from onset of the incident to the conclusiona MOPS (or similar) policy may also provide an officer coverage for legal of the case. defensecostsinarelatedcivillitigationarisingoutofthecasualtyif personally sued and/or the officer incurs lost wages for any time out of work IS IT IN AN EMPLOYERS BEST INTERESTSwhen a Coast Guard license is suspended.TO PROVIDE ITS OFFICERS COVERAGE?In general, it is in an employers best interests to provide coverage to its officers. Each company has its own philosophy when it comes toABOUT THE AUTHOR: providingfullyorpartiallypaidbenefitstoitsemployees.However, providing affordable license insurance to its officers often becomes aRandy ONeill is Senior Vice President win-win situation. Firstly, a successful defense of an officers license keepswith PVA Associate member Lancer him/her on the active roster and secondly, the appreciation and resultingInsurance Company and former loyalty helps to not only retain good employees, but also helps attractManager of its MOPS Marine License qualified new ones. Insurance division. Over the past 36 years, ONeill has spoken and written A good example of the need for professional mariners to obtain licenseon many occasions on the importance of insurance can be found in the quick read: Stand by Me. https://www. U.S. Coast Guard license protection. mopslicenseins.com/maritimes-a-mops-blog/stand-by-me RANDY ONEILL, LANCER INSURANCE COMPANYNOV 2020 25 LICENSE INSURANCE'