What the Heck Is the USL&H Workers' Comp Act
Construction Insurance and USL&H Overview
“Great another insurance acronym that pops up in the bid specification for an upcoming project I want to bid on” is a thought that often enters into contractors’ minds. After reviewing the plans, the job scope, calculating man-hours, labor and material costs looks like something your company can knock out of the park. The weird thing is, however, they’re asking for USL&H (U.S. Longshore and Harbor) coverage, but your company doesn’t unload barges, work on vessels or have a dive team, so what does that mean when you already have Workers’ Compensation insurance?
Chances are this project is near, close to or even on a waterway that will require a federally mandated coverage for workers called USL&H. If the site is near an ocean, lake, river or stream, USL&H coverage is required because this type of work (around water) is excluded in your current workers’ compensation policy.
The bid specification mandates the coverage and the project manager for the general contractor has confirmed you need to include this in the bid, so now what?
Adding this coverage can be as simple as an endorsement to your current workers’ compensation policy. However, depending on the state, location and type of work performed, your current carrier may decide they don’t want to underwrite the risk. In this instance, a specialty carrier can be used. As with any project, you’ll need to provide some specific detail for an accurate quote including but, not limited to:
- Number of man-hours
- Payroll and sales amounts
- Address or location of the project
- Safety procedures that will be in place during the work
- Duration of the project
The cost for the endorsement is usually based on payroll. On average it’s a 30% increase on your current net labor rate. For example, if your current net labor rate per 100 of payroll is $13.00, the USL&H rate per 100 of payroll for the project would be $16.90. This amount can fluctuate depending on the project so, confirm with your insurance carrier before submitting your bid.
So what if the job you’re looking at is by water and the bid specification doesn’t include a requirement for USL&H? Working around or near water is the trigger. Even if the bid specifications don’t specifically require USL&H, review the details of the project with your insurance carrier to determine if they’d provide coverage in the event of a loss. Likely, they wouldn’t, so don’t put your company at risk by taking on a project where a loss could occur and find out there’s no coverage.
As always, when you discover any new acronyms in your contracts related to insurance, let us know. We’re here to help you navigate (pun intended) through all your risk management needs to minimize risk and maximize health across your entire organization.
Want more information on workers' comp and how to minimize risk? Chat with one of our construction experts!
- Workers’ Compensation: Back to Basics Seminar
- Making the Leap to a Loss Sensitive
Wokers' Comp Program
- Surf's Up With Workers' Comp Premiums
- Incident and DART Rate Calculator
- Workers' Compensation E-Book
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