Monday, September 26, 2011

6006F- The Mystery of United States Longshore and Harborworkers Act Insurance

by Rick Fender, Chapter Chair Central Florida for the Florida Marine Contractor's Association

For that last several years since the new 6006F workers compensation code was developed by NCCI with help from your Florida Marine Contractor’s Association, I have struggled with who is required to carry the coverage and when the coverage applies. If I am confused about it perhaps some of you are as well. Two of the major problems that I face in the marine construction business are unlicensed activity and un-insured or underinsured activity. Not only are lay persons such as homeowners and business owners unaware of these issues and the exposure to liability that they face but I have found that many city and county governments as well as insurance agents and carriers are unenlightened as well.

My most recent frustration was with an Orange County city that did not require 6006F on a weir/sheet pile and revetment job they had for bid. Their reasoning was that it was on a non-navigable waterway. My mistake was stating to the City that the work required United States Longshore and Harbor Worker’s Act insurance. Then the City called their carrier who said the USL&H was not required. I called the City’s Loss Prevention Department and discussed this with them. They said if I had additional information for them, they would consider it.

I enlisted Kelly White of Kelly White & AssociatesInsurance, LLC who is my insurance agent as well as the Second Vice President of your Florida Marine Contractor’s Association, to clarify this issue and convince the City to require this coverage.

The following is an excerpt from the emails between NCCI Holdings, Inc.’s Regulatory Assurance professional Veruschka Zachtshinsky and Kelly White-

Dear Lori Lovgren, I need some assistance if possible.  I have an insured that is having a difficult time understanding why he is required to carry the 6006F class code for his work and he is losing jobs to other marine contractors insured under 5403 with no F loading or even 8227. Rick Fender has been contacting the various municipalities to discuss the 6006F code prior to bid due dates and continues to run into a brick wall.   He has requested that I forward the below job description to NCCI for a determination as to what code he would need for that job.  He feels he may be the one using the incorrect code. Kelly White

Hello Kelly, I am responding to your email on behalf of Lori. In reviewing the insured’s website and the job description provided in your email, it appears Code 6006F is the appropriate class code.  In Florida, Code 6006F is an all-inclusive code applicable to marine construction such as marine pile driving, dock & seawall, jetty or breakwater, and dike or revetment construction. Code 8227 can be assigned to a permanent yard maintained by the insured for the storage of material or the storage and maintenance of equipment since Code 6006F is a construction code. Veruschka Zachtshinsky

To: Veruschka Zachtshinsky-What if “all” of the work is on non-navigable water? Kelly White, CRIS

Hi Kelly, In Florida, there doesn’t appear to be a distinction. I’ve attached Circular FL-2006-04, which announced the approval of Item 04-FL-2005. This filing discontinued national Code 6003—Pile Driving and Code 6005—Jetty or Breakwater Construction—All Operations to Completion & Drivers. These codes were replaced with state-special Code 6004—Land Pile Driving and Code 6006F. Veruschka Zachtshinsky

Further, Kelly has explained below how the USL&H benefits apply and where the State Act Workers Compensation applies.

Insured’s working on Navigable and Non-Navigable waters are required to insure under the same workers compensation code 6006F which includes the USL&H load.   The code is combined to include USL&H as well as State Act.   Therefore, if an employee is working on non-navigable waters during all of their employment, then the WC company would settle the claim as a State Act exposure.  At that point there would not be any jurisdiction for the Federal requirements and the exemptions would technically be sufficient. 

If however, that same company worked on Non-navigable and navigable waterways, the WC company would have to determine how much time was dedicated to what would be considered subject to USL&H and how much for State Act.  This situation could go either way depending on various circumstances.   If it was determined that the exposure was USL&H then an exemption would not be sufficient, if the worker was an owner of the company that had the exposure. 

The really difficult part of determining who is and isn’t subject to USL&H claims settlement is because every company has different areas they work in.  There are inland lakes that are considered navigable due to being connected by locks or tributaries or quite possibly commercial commerce (boat rental facilities).  The chances of having a company work only on retention ponds and land locked lakes in Florida is in the low percentages at best.  However the staff the insured has maybe assigned duties that do not make them subject to the USL&H so again the claim would be settled as State Act.

Please find the attached 6006F Scope Sheet that gives you more information regarding the coverage you are paying for. I hope this helps all of my fellow legitimate Florida marine contractors in the battle to comply with the law and make an honest dollar.


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