Maritime Coverage Endorsement (WC 00 03 08)
Note: The form code WC 00 03 08 is typically associated with the "Partners, Officers and Others Exclusion Endorsement." However, this description is based on the provided title and summary indicating a "Maritime Coverage Endorsement" that modifies employers liability coverage for maritime exposures under laws like the Jones Act.
1. What the Form Is
The Maritime Coverage Endorsement modifies the standard Workers Compensation and Employers Liability Insurance Policy (WC 00 00 00). Its primary purpose is to provide Employers Liability coverage for injuries to a "master or member of the crew" of a vessel who are subject to maritime laws. Standard workers' compensation policies often exclude coverage for such employees because their remedies for workplace injuries typically fall under federal maritime laws, such as the Merchant Marine Act of 1920 (commonly known as the Jones Act), the Death on the High Seas Act (DOHSA), and General Maritime Law. These laws allow injured seamen to sue their employers for damages, including for negligence or unseaworthiness of the vessel, and this endorsement addresses that specific liability exposure.
2. Classes of Business It Applies To
This endorsement is crucial for employers whose employees work as masters or crew members on vessels and could be deemed "seamen" under maritime law. Specific industries and business types include:
- Vessel Owners and Operators: Businesses that own and operate various types of vessels, such as:
- Commercial fishing fleets
- Tugboat and barge operators
- Ferries and water taxis
- Charter boat operations (e.g., sightseeing, fishing charters)
- Cargo and transport ships
- Offshore supply vessels
- Research vessels
- Marine Contractors: Companies whose employees perform work aboard vessels, even if those vessels are not owned by the employer. For instance, a firm providing specialized engineers, technicians, or other personnel to work on a third-party vessel.
- Offshore Operations: Businesses involved in offshore activities like oil and gas exploration and production where employees work on vessels or mobile offshore drilling units that qualify as vessels.
- Miscellaneous Marine Operations: Any business where employees have a substantial connection to a vessel in navigation and contribute to its mission, potentially qualifying them as seamen.
Real-world example: A company operating a fleet of tugboats would use this endorsement to cover its liability should a crew member be injured due to the employer's negligence (e.g., failure to maintain safe equipment) and sue under the Jones Act. Another example is a marine construction firm whose employees are transported by and work from a barge, qualifying them as seamen.
3. Special Considerations
Several important factors must be considered when using this endorsement:
- Jurisdictional Complexity: Claims for maritime employees are governed by federal law, which is distinct from state workers' compensation systems. Understanding whether the Jones Act, DOHSA, General Maritime Law, or even the Longshore and Harbor Workers' Compensation Act (LHWCA) applies is critical, as they offer different remedies and cover different types of maritime workers. This endorsement is specifically for those employees qualifying as "seamen."
- Definition of a "Seaman": A key requirement for Jones Act coverage is that the injured employee must qualify as a "seaman." This generally means the worker must have a substantial employment-related connection to a vessel in navigation (or an identifiable fleet of vessels) and contribute to the vessel's function or mission. This determination can be complex and is often a point of legal dispute.
- "Vessel in Navigation": For the Jones Act to apply, the injury must occur in connection with a "vessel in navigation." Structures permanently affixed to the seabed or vessels taken out of navigation (e.g., for extensive repairs) might not qualify.
- Exclusion in Standard Policy: It's vital to remember that the standard Workers Compensation and Employers Liability policy typically excludes coverage for bodily injury to a master or member of the crew of any vessel. This endorsement is necessary to buy back this coverage under Employers Liability Insurance (Part Two of the policy).
- Maintenance and Cure: Under General Maritime Law, employers have an absolute, "no-fault" duty to provide injured or ill seamen with "maintenance" (reasonable living expenses) and "cure" (medical expenses) until they reach maximum medical improvement. This endorsement often extends to cover these obligations.
- Interaction with P&I Policies: For vessel owners, Jones Act coverage and other maritime liabilities are often covered under a separate Protection and Indemnity (P&I) insurance policy. This endorsement to a Workers Compensation policy may be used by employers who have a maritime exposure but for whom a full P&I policy is not the primary solution, or to supplement existing coverages.
Real-world example: An employer might mistakenly believe their state workers' compensation policy covers a deckhand on their coastal fishing boat. If that deckhand is injured and qualifies as a seaman, the state WC claim would likely be denied, and without this Maritime Coverage Endorsement (or a P&I policy), the employer would face an uninsured Jones Act lawsuit.
4. Key Information for Agents and Underwriters
Agents and underwriters must carefully evaluate several factors when dealing with this endorsement:
- Risk Assessment: A thorough understanding of the insured's maritime operations is essential. This includes:
- Types, sizes, and uses of vessels involved.
- Geographical areas of operation (e.g., inland waters, coastwise, high seas).
- Specific duties of the crew members.
- The insured's safety programs, training, and loss history.
- Contractual requirements for maritime coverage.
- Pricing/Rating: Premiums for this coverage can be significant due to the potential for high-value claims under maritime law (which can include damages for pain and suffering, unlike state workers' compensation). Rating may be based on payroll, number of crew members, type of vessel, and operational exposures.
- Coverage Gaps: Ensure the limits of liability are adequate for the exposure, as Jones Act judgments can be substantial. Confirm that the endorsement's scope aligns with all potential maritime liabilities the insured faces (Jones Act, unseaworthiness, DOHSA, maintenance and cure).
- Underwriting Guidelines:
- Scrutinize the employee classifications to confirm who qualifies as a "seaman."
- Evaluate the condition and seaworthiness of vessels if owned by the insured.
- Review the experience and qualifications of the masters and crew.
- Consider the navigational limits and whether foreign voyages are undertaken.
- Clarify if coverage is needed for work on owned vessels, non-owned vessels, or both.
- Distinction from Other Endorsements: Be careful not to confuse this with the WC 00 02 03 Voluntary Compensation Maritime Coverage Endorsement, which offers state workers' compensation-like benefits on a voluntary basis, rather than addressing tort liability under maritime laws like the Jones Act. Also, distinguish from LHWCA coverage (WC 00 01 06 A), which applies to different classes of maritime employees (e.g., dockworkers, ship repairers not part of the crew).
Real-world example for underwriters: When underwriting an account for a seafood company with a fleet of trawlers, the underwriter would need to assess payroll associated with the crew, the age and condition of the vessels, the fishing areas (e.g., nearshore vs. deep sea, which can affect risk), and the company's safety record and procedures for preventing slips, falls, and machinery accidents – common sources of Jones Act claims.