Federally Mandated Workers’ Compensation
for Maritime Subcontractors: U.S. Longshore & Harbor
Subcontractors play a vital role in shipyards, docks, and harbor operations across the country. Their work is often high-stakes and physically demanding, from repairing vessels to loading equipment. Yet, many subcontractors and contractors alike don’t realize the risks involved to their business if not properly insured under the federally mandated regulations associated with the United States Longshore and Harbor Workers’ Compensation Act (USL&H).
What Is USL&H Coverage
The USL&H Act is a federal law which mandates compensation and medical care for injured employees working on or near navigable waters of the United States. This includes shipbuilders, dockworkers, and many subcontractors who perform tasks on piers, wharves, terminals, and shipyards.
What Makes Maritime Subcontractors Different
Subcontractors often handle crucial jobs supporting primary maritime operations, and they do fall under the rules of the USL&H Act whether working for a marine construction company, ship repair crew, or as an independent contractor. USL&H coverage is required for contractors, subcontractors, and their employees. There is an important connection among contractors and their subcontractors when it comes to who’s responsible for coverage.
For contractors to mitigate risk and protect their business, they must know their subcontractors have proper Workers’ Compensation coverage in place. If the subcontractor fails to carry the proper coverage, the general contractor or principal can be held secondarily liable for compensation benefits should a worker become injured or contract a disease while on the job.
Breaking Down USL&H Coverage
1. USL&H Worker Benefits
The USL&H Act is designed to protect employees with coverage that includes:
○ Medical treatment for work-related injuries or illness
○ Rehabilitation services
○ Lost wages during recovery
○ Compensation for long-term disability
2.
Why State Workers’ Compensation Is Not Enough
Many subcontractors carry general liability or state Workers’ Compensation. These policies may work on land but usually do not apply in maritime zones. The location and nature of the work determine which laws apply, and the rules under USL&H are strict.
Example:
○ A painting subcontractor working in a warehouse is typically covered under state law.
○ The same painter working on the hull of a ship docked in a harbor likely falls under USL&H laws.
3. If USL&H coverage is not in place for the painter working on the ship and an injury occurs, it could result in denied claims or legal action.
4. The Risk of Going Without USL&H Coverage
Operating without proper coverage puts subcontractors and hiring businesses at risk. Here’s why:
○ Injured workers may not receive benefits
○ Contractors may be held responsible for uncovered claims
○ Projects may face delays or legal disputes
○ Businesses may be fined for non-compliance
○ Reputational damage could result in lost opportunities
5. Who Is Required to Have USL&H Coverage?
Contractors and subcontractors whose work involves:
○ Welding, electrical work, or mechanical repairs on boats or ships
○ Loading or unloading cargo at a dock
○ Building or repairing docks, piers, or harbor facilities
○ Diving, inspections, or underwater maintenance
6. A more complete list can be found on our USL&H Workers’ Compensation Program page.
Why It Matters – Now More Than Ever
The maritime industry isn’t slowing down. As global shipping, port expansion, and infrastructure projects grow, so does the demand for skilled subcontractors.
This means more jobs and more risk. Subcontractors need to understand these risks to protect themselves, the contractors who employ them, and the trust they have cultivated with their contractor partners.
How PMC Insurance Group Helps
At PMC Insurance Group, a subsidiary of One80 Intermediaries, our Workers’ Compensation experts can deliver customized solutions designed for maritime contractors and subcontractors. With a deep understanding of USL&H regulations, we help ensure businesses meet their state and federal coverage requirements.
For more information, contact us at (781) 449-7744 or learn more about our specialized USL&H program.