38 FOGHORN FOGHORN FOCUS Insureds often have a difficult time with the fact that insurance is non tangible. A hefty bill for something you can’t see or touch can be frustrating, to say the least. Un- fortunately, many people do not realize how important insurance is until a loss occurs. The reality is that insurance is a necessity, especially in our current legal environment; the size of judgments and settlements are increasing at an exponential pace with no signs of slowing down. Although insurance is a necessary evil, you can lessen the burden by taking meaningful steps to improve protection of assets, insurability, and insurance program costs. We all know that safety is paramount, not just for our passengers, but for our customers, employees, and the general public. A loss can have countless devastating consequences—bodily injury to passengers or crew, prop- erty damage, regulatory action, and lasting reputational harm, to name a just few. Beyond protecting lives and livelihoods, a demonstrated commitment to safety shows underwriters that your operation is proactively managed and safety is prioritized. The below section outlines the typical exposures and cov- erages associated with passenger vessels, along with risk mitigation steps you can take to ensure you’re getting the most competitive insurance rates. • Employee Exposures • Workers Compensation – State Act • Experience modification factor is one of the biggest drivers of premium. This factor is directly deter- mined by your loss history on workers compensation claims, taking both severity and frequency of claims into account. • Workers Compensation – United States Longshore and Harbor Workers’ Compensation Act (USL&H) • More favorable rates can be obtained • Unlike traditional workers compensation, USL&H is a federal coverage, so many carriers do not report to National Council on Compensation Insurance (NCCI) or other applicable independent rating bureaus. Experience modification factor may not apply to this portion of your coverage. • Jones Act/ Crew Coverage • Possibly the biggest exposure for passenger vessel operators and their crew. These operations have unique risks and exposures that differ from those of land based or shoreside duties as noted above. • Over the water employees are protected under federal maritime law. • The three previously mentioned coverages may see the benefit of improved rating by implementing the following practices: • Comprehensive employee safety training • Thorough new hire orientation and ongoing education • Routine safety meetings • Training • Job hazard analysis • Preventive equipment maintenance • Drug and alcohol testing programs • Pre-employment screenings Beyond protecting lives and livelihoods, a demonstrated commitment to safety shows underwriters that your operation is proactively managed and safety is prioritized.
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