Goofy USL&H Law Impacts Us All


Somebody needs to inform our elected representatives in the US Congress that a
65-foot pleasure boat isn't an ocean liner or an oil tanker. Outdated,
erroneous perceptions currently in place impose arbitrary financial hardships
on boatyards. As with most other costs, fees, and taxes, the consumer
ultimately absorbs the lion's share of the increased expenditures.
Specifically, the US Longshore and Harbor Workers' Compensation Act needs to be
revised.

Peg Miller, of Miller and Miller Boatyard in Seattle, outlined the practical
realities and challenges of the current law. "Let's say we are working on two
boats. One is 64-feet, and the other is 65-feet. If our shipwright falls and
breaks his leg on the 64-footer, the Washington State Department of Labor and
Industries will provide workman's compensation coverage for medical bills, and
Washington State will replace some of the wages lost while waiting for the
break to heal."

Peg continued, "If our worker falls and breaks his leg on the 65-footer,
Washington State Department of Labor and Industries doesn't provide coverage.
On vessels 65-feet and above, we have to buy an additional policy to provide
USL&H coverage. That stands for United States Longshore & Harbor Workers'
insurance."

"The cost of the USL&H insurance is ridiculous," remarked Peg. "In the case of
our yard, the cost for the USL&H policy is six times as high as the cost for
Washington State
Department of Labor and Industries insurance. Based on a discussion with our
insurance broker, we have concluded that both policies are calculated to insure
an average risk of about $19,000."

"Back when this law was enacted," Peg Miller observed, "The typical pleasure
boat was
a 26 to 30-footer, a 36-footer was considered a pretty big boat, and about the
largest pleasure boats around were 48 feet. These days, that 36-footer is a
relatively little boat, boats between 40-50 feet are increasingly common, and
many manufacturers build pleasure boats that are 65 feet or even larger."

A yard worker installing an inverter on a 65-foot mass-produced pleasure yacht
certainly isn't exposed to the same type of industrial risks as a worker making
repairs aboard a working container ship or a fish processor, yet the industrial
insurance premiums are the same.

(It should be noted that Washington State Labor and Industry payments to
injured workers are not "welfare" disbursements draining the general fund.
Labor and Industry payments are settlements from a dedicated insurance reserve
established by employers in Washington State. The frequency and severity of
claims is considered when calculating Washington State L&I rates for individual
firms. Those with better safety records pay less than those generating a
greater number of losses.)


The additional costs for USL&H insurance are not borne strictly by the owners
of the larger boats. Peg Miller commented that the premium for USL&H insurance
exceeded the yard's total bill to the owner of the first 65-footer Miller &
Miller repaired this year.
Additional work orders for other boats in the size category will help absorb
some of the repair costs, but at the time the insurance premium is paid most
yards will be unable to predict how many repair jobs they will actually be
doing on boats 65-feet and above.
Some of these costs must, predictably, be reflected in the overall "hourly
rate" charged to every customer patronizing the repair yard.

There is a risk that some yards might elect to pad the profits by avoiding the
purchase of USL&H insurance. In the event of an uninsured workplace accident
on a boat over 65-feet , the injured worker's attorney will draw a "bull's-eye"
around every fat wallet in sight. While "rich boater" is usually an oxymoron,
it remains a common public perception. The worker's attorney would likely name
the boat owner as a co-defendant. While the boat owner may (or may not) prevail
against a lawsuit, there could be major inconvenience and no small expense in
climbing off the legal hook. Owners of boats over 65-feet should be aware that
Washington State L&I is not going to pay any benefits for death or injury
suffered by workers aboard their vessel.

It makes sense to recognize that workers on commercial vessels operate in a
more dangerous, industrial environment than workers doing similar work on boats
used strictly for pleasure. It makes sense to charge higher rates for L&I
coverage for workers involved in more hazardous occupations. What does not make
sense in today's environment is to arbitrarily declare any boat 65-feet or over
equally and especially dangerous in the eyes of the law. Nor does it make sense
to declare that a 58-foot crab boat is not a potentially more dangerous
workplace than a 58-foot Sea Ray, Meridian, or other mass-produced pleasure
yacht.

Boaters would be well served if our federal representatives raised the bar to a
level that would include the vast majority of pleasure yachts. A figure
somewhere near 90-feet might be as appropriate today as was 65-feet when the
USL&H law was drafted.
It would be realistic to exclude commercial vessels from the increased length
allowance, or even to reduce the commercial threshold to a number less than 65
feet.
LOA is an arbitrary and unreliable way to assess a workman's risk aboard a
boat.

Should the USL&H statute be revised to reflect modern realities, it would be
important for Washington and other states to extend state L&I coverage to
workers on vessels between 65-feet and a new, more reasonable limit.

As Peg Miller observed, "It's the boat owning public that has the power to get
Congress to update the law. When several boat owners call with the same
concern, the representatives see a lot of potential votes on the line. When
boatyard owners call, we're more easily dismissed as just another special
interest group with an agenda."