Don't Rock the Boat-You May Not be Insured
Insurance Coverage Near Bodies of Water
If you have a job that involves work on, over or near water, you may have little insurance protection. Most standard insurance policies for contractors have limited or virtually no coverage for exposures that are created when working on a river, lake, ocean or for that matter, any body of water.
Some of the exposures include:
1. Injury to Employees or Subcontractors’ Employees – Worker's Compensation insurance coverage may not, and likely will not, apply to an injured worker while working on or near water.
For example, if an employee is working on a federally defined navigable waterway (on a barge, boat or waterborne vessel), over water (on a bridge) or near water (dock, pier, seawall, harbor etc.), the injured party may opt to collect Longshoreman’s and Harbor Workers’ Compensation benefits rather than state workers’ comp benefits. Workers’ comp policies don’t automatically provide protection for longshoreman and harbor worker’s benefits. If your insurer can provide the coverage, there will be a material cost to add it. Also, if an injured person is considered a “seaman” assigned to a vessel that operates on a navigable waterway or, works in the energy industry in the Gulf of Mexico, other admiralty laws such as the Jones Act or The Outer Continental Shelf Lands Act (OCSLA) are available to them. Again, both the Jones Act and OCSLA aren’t included in standard insurance programs and to get the coverage can be a material expense.
2. Liability to Third Parties – Bodily injury to other parties or damage caused to their property, including consequential loss, is excluded from most liability (commercial general liability, umbrella and excess liability) insurance policies.
The only exception is that coverage is usually provided for non-owned watercrafts less than 26 feet in length. Coverage can be secured by amending existing policies, buying owned or non-owned watercraft liability policies or protection and indemnity insurance. Also, risk transfer may be used by securing protection from the barge or boat owner’s policy as an additional insured. Here again, there is an additional insurance expense involved that can be material.
3. Equipment and Materials – Many inland marine policies that insure your equipment or materials used for a job, aren’t insured when on a waterborne vessel. Standard coverage often needs to be modified to provide insurance protection while on a boat or barge.
The risks involved when working on or near water need to be discussed with a knowledgeable broker that can assess what coverage is needed. It’s recommend to engage your broker prior to bidding on any work that may involve water. The additional costs and more importantly, an uninsured catastrophic loss to your company, are at risk. It's not uncommon for work involving water to involve uninsured exposures that aren’t required by contract. Your broker can help you determine the most effective and cost-efficient way to protect your company.
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