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For Immediate
Release
mailto:dgreen@nmma.org |
Friday, February 01, 2002 |
MARINE INDUSTRY TO LOBBY FOR
CHANGE IN LONGSHORE ACT
Outdated law
puts unfair financial burden on recreational boat
industry |
Chicago, IL - Ambivalent exclusions and vague
definitions in the Longshore and Harbor Workers’
Compensation Act (LHWCA) have cost the marine industry
millions of dollars in insurance fees which in turn has
created job loss for over three decades.
Since
1927, the LHWCA has placed an undue hardship on the
recreational boating industry. Originally the LHWCA was
created to provide protection to shore based workers
injured while temporarily on navigable waters. The 1972
amendment addressed the reverse, responding to
longshoremen who walked out of federal coverage every
time they left a ship. Because state benefits were less
generous, Congress expanded the federal coverage to
encompass injuries occurring on piers and adjacent land
used for loading and unloading ships.
NMMA, MOAA
and MIASF believe that this law was never intended to
cover recreational boats but instead ships. They have
been working to eliminate recreational boating from the
LHWCA.
The impact of the Act on the recreational
marine industry is wide-ranging, affecting every level
of the chain from manufacturer down to boater. The
industry is pursing a change in the law to exclude the
recreational boating industry because the original
intent of the law was never intended to cover
recreational boats but instead ships.
This law
places undue financial hardship upon the recreational
marine industry, forcing manufacturers, boat yards,
marinas, repair technicians and builders to purchase
Longshore insurance for every employee within
jurisdictional boundaries of the LHWCA. Longshore
coverage is often three times more expensive than state
workmen’s compensation, which is effectively pricing
small marinas and subcontractors out of
business.
Larry Nelson of Westport Shipyard says
the Act makes it increasingly hard for him to compete
and doesn’t add any value for his employees. “Our
premium for 2002, on an estimated payroll of $7.8
million, is expected to run more than $900,000. This
creates a real burden on us and has forced us to
eliminate jobs,” says Nelson.
Boatyards and
manufacturers of boats over 65-feet must verify workers
compensation coverage for every laborer that enters
their facility and if an uninsured laborer enters their
yard, they will incur the liabilities and penalties for
failure to secure compensation.
Marinas are
exempt from the LHWCA except under cases of
construction, replacement and expansion. However, once a
subcontractor enters the facility, the marina and boat
owner are liable if the subcontractor has not secured
LHWCA coverage. “The exorbitant cost of the coverage has
resulted in small marinas not being able to compete
because they can no longer provide services to vessels
greater than 65-feet. This forces small marinas to shut
down or eliminate jobs,” says Stacey Proctor,
The LHWCA impacts boat owners because they are
incurring the costs from the subcontractors for
liability insurance meant for the ship building
industry. Boaters have to spend more time docked
awaiting service instead of enjoying their boating
experience and they can incur liability exposure by
hiring a subcontractor without LHWCA insurance.
“Amending the law to exclude recreational marine
businesses would allow all subcontractors to obtain
affordable coverage. In turn, the exclusion will create
jobs and keep small businesses afloat, especially in
these uncertain economic times,” says Kelly Bobek, NMMA
director of Federal Government Relations.
For
more information on joining the marine industry at
Legcon 2002 and supporting it’s efforts to be removed
from the Longshore and Harbor Workers’ Compensation Act,
contact Bobek at (212) 721-1608;
kbobek@nmma.org.
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