1. Forms
2. WC
3. WC-00-01-06

What the form is

The WC 00 01 06 A, Longshore and Harbor Workers' Compensation Act Coverage Endorsement, is an endorsement to the standard Workers Compensation and Employers Liability Insurance Policy. Its primary purpose is to extend coverage to satisfy the employer's obligations under the United States Longshore and Harbor Workers' Compensation Act (USL&HWCA), codified at 33 U.S.C. Sections 901–950. This federal law provides compensation and medical care to employees disabled from injuries that occur on the navigable waters of the United States, or in adjoining areas customarily used in loading, unloading, repairing, or building a vessel. It specifically excludes seamen (masters or members of a crew of any vessel). The endorsement amends the policy to ensure that benefits required by the USL&HWCA are provided and also modifies the Employers Liability Insurance (Part Two) section of the policy so that its exclusion 8 (relating to obligations under workers' compensation laws) does not apply to work subject to the USL&HWCA.

Classes of business it applies to

This endorsement is crucial for businesses whose employees perform work that falls under the jurisdiction of the USL&HWCA. Such businesses typically operate on or near navigable waters. Real-world examples include:

• Stevedoring companies: Businesses involved in loading and unloading cargo from vessels.
• Ship repair yards: Companies that repair, dismantle, or build vessels.
• Marine construction companies: Businesses engaged in constructing or repairing docks, piers, bridges, or other structures in or over navigable waters.
• Terminal operators: Entities that manage port terminals where maritime activities occur.
• Employers with incidental maritime exposures: Any business whose employees, even if not primarily maritime workers, perform tasks on docks, wharves, piers, or other areas adjoining navigable waters that are customarily used in loading, unloading, repairing, or building a vessel.

Special considerations

• Jurisdictional Complexity: Determining whether an employee's work falls under the USL&HWCA can be complex and often depends on both the location of the work (situs test) and the nature of the work (status test). Misclassification can lead to significant uninsured liabilities.
• Scheduled States: The endorsement requires the listing of states in its Schedule where the USL&HWCA coverage is to apply. Coverage is only effective in those listed states.
• Exclusivity: This endorsement specifically addresses USL&HWCA exposures. It explicitly states that it does not apply to work subject to the Defense Base Act, the Outer Continental Shelf Lands Act, or the Nonappropriated Fund Instrumentalities Act. Separate endorsements (e.g., WC 00 01 01 for Defense Base Act, WC 00 01 09 for Outer Continental Shelf Lands Act) are required for those distinct federal exposures.
• Increased Benefits and Rates: Benefits under the USL&HWCA can be more generous than those provided by state workers' compensation laws, leading to higher premium rates for this coverage. The endorsement details how rates for classifications not typically subject to USL&HWCA will be increased by a specified percentage if the work performed falls under the Act.
• Penalties for Non-Compliance: Employers subject to the USL&HWCA who fail to secure the required insurance can face severe penalties, including fines and direct liability for benefits.

Key information for agents and underwriters

• Thorough Exposure Analysis: Agents and underwriters must meticulously analyze the insured's operations to identify any potential USL&HWCA exposures. This includes reviewing job descriptions, work locations (especially proximity to navigable waters), and contracts that might stipulate USL&HWCA coverage.
• Accurate Classification and Rating: Ensure that payroll for employees subject to USL&HWCA is correctly classified and rated. The endorsement specifies a percentage increase for non-F classification rates when work is subject to the Act. Underwriters should verify the appropriate Longshore and Harbor Workers' Compensation Act Coverage Percentage shown in the Schedule.
• Identify Coverage Gaps: Proactively discuss other potential federal exposures with the insured. If operations involve work on military bases overseas (Defense Base Act), on the Outer Continental Shelf (OCSLA), or for nonappropriated fund instrumentalities (NFIA), additional specific endorsements are mandatory.
• Underwriting Scrutiny: Maritime operations often involve heightened risks. Underwriters should carefully evaluate the employer’s safety protocols, loss history, experience in maritime work, and understanding of USL&HWCA requirements. The financial stability of the insured may also be a factor due to the potentially higher claim costs.
• Policy Language: Remind insureds that Part Two (Employers Liability Insurance), exclusion 8, is amended by this endorsement for work subject to the USL&HWCA. However, other exclusions in Part Two may still apply.