Longshore and Harbor Workers' Compensation Act: What Is It - and Do I Need Insurance Coverage for It?

As an employer in Virginia, you no doubt carry state workers’ compensation insurance coverage in the event one of your employees is injured while working within the course and scope of his or her employment.  But did you know that you could also be subject to the Longshore and Harbor Workers’ Compensation Act (“LHWCA”)?  There is concurrent jurisdiction in Virginia; thus, an eligible employee may be able to recover benefits under both the state and federal laws.  

LHWCA is a federal act designed to provide compensation and medical care to employees disabled from injuries that occur on the navigable waters of the United States, and certain areas adjoining the water customarily used for loading, unloading, repairing, or building vessels.  In addition to longshore and other maritime workers, the LHWCA covers a variety of other employees through several extensions to the law.  For example, employees of U.S. contractors outside the continental U.S., Alaska and Hawaii are covered, as are civilian employees of post exchanges, service clubs, etc. of the Armed Forces, and employees of private industry conducting certain operations on the Outer Continental Shelf of the U.S.  

This law was originally enacted to protect workers engaged in stevedoring and ship building operations, but through lawsuits and congressional amendment, has been expanded to encompass nearly any employee whose work takes him on or near “navigable waters,” including, for example, construction workers on barges and those that supply equipment or services “on the water.”  Longshore claims provide a higher benefits schedule and more severe penalties for noncompliance; thus, this law has extreme ramifications for companies who are not considered traditional “maritime” employers, but nevertheless have “incidental LHWCA” exposure.  

An employer who may have Longshore exposure must have Longshore insurance coverage.  Failure to secure coverage is against the law, and carries serious consequences.  An employer who fails to satisfy the insurance requirement is subject, upon conviction, to a fine of not more than $10,000, or by imprisonment for not more than one year, or both; and where the employer is a corporation, the President, Secretary and Treasurer may be individually liable for the compensation due.  In addition, failure to properly insure may provide the injured worker the opportunity to maintain an action at law or in admiralty for damages on account of the injury.  In such action, the employer’s defenses are severely limited and damages may greatly exceed those available in a workers’ compensation claim.  

LHWCA insurance coverage is expensive – generally two to three times the cost of state workers’ compensation coverage.  However, not having it could turn out to be more expensive than merely paying the insurance premiums.  Therefore, if your business operations take your employees on or near the water, you are well-advised to consult with your insurance broke or attorney to determine if you may be subject to the LHWCA, and if so, to secure proper LHWCA insurance coverage – lest you find yourself and your company in “deep water.”