Oil Spill Dilemmas

Insurance carriers and brokers are puzzling through the coverage dilemmas presented by the Deepwater Horizon cleanup efforts.

Are the shore side cleanup workers covered by state workers’ compensation laws or by the federal Longshore and Harbor Workers’ Compensation Act?

Naturally I have an opinion.

I think that these workers meet the “situs” requirement for Longshore Act coverage.  They are working in an area that adjoins navigable water.  Typically, they are moving sand around and loading contaminated sand on to trucks for removal.  The Third Circuit in Nelson v. American Dredging Company, 143 F.3d 789 (1998) decided that sand can be cargo and dredging/grading can be loading/unloading.

I think that they meet the “status” requirement by virtue of an appropriately liberal definition of the term “harbor worker”.  The work seems sufficiently maritime to me.

There is some relevant precedent.  In Fontenot v. Industrial Clean-up, Inc., 92 LHC 971 (1992) a worker employed in oil spill clean up was considered to be engaged in “clearly a maritime activity conducted in a maritime environment”.

There is room for interpretation.  But, as usual, in view of the penalties to the employer for needing but not having Longshore Act insurance coverage, my advice is to resolve any doubt in favor of obtaining coverage.

The same might be said for the workers who are out on vessels laying containment booms and doing the wide variety of jobs necessary to deal with the disaster.  They may have a strong case for Jones Act seaman status, or they may be essentially land based maritime workers who are spending some of their working hours on board vessels, or they may be covered by the Outer Continental Shelf Lands Act based on their location.  Much can be said on all sides.

But, with regard to the shore side clean up workers, my opinion is that they are covered by the Longshore Act.  As always, resolve all doubts conservatively by buying coverage. 

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