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Division of Longshore and Harbor Workers' Compensation (DLHWC)

Loyola Law School
U. S. Department of Labor OWCP
DBA Conference
October 2008

Insurance and Waivers

John Chamberlain
Office of Workers’ Compensation Programs
Division of Longshore & Harbor Workers’ Compensation

 

Insurance


The provisions of the Longshore and Harbor Workers’ Compensation Act and its Regulations apply to the Defense Base Act

  • 4(a) makes the employer
  • Liable for the benefits
  • Obliged to secure the benefits

Insurance

  • 32(a) (1) provides for insurance by an authorized carrier
  • 32(a) (2) provides for self-insurance

Insurance

  • 5(a) Failure to secure payment allows employee either to collect compensation, or to sue employer for damages
  • The defenses of “fellow servant”, “assumption of risk” and “contributory negligence” are not available

Insurance

  • 38(a) The corporation and its president, secretary and treasurer are severally liable for a fine of $10,000 and imprisonment for not more than one year.
  • The president, treasurer and secretary are also severally liable jointly with the company for the benefits during the period it fails to secure compensation

Insurance

  • Failure to report a claim carries a separate penalty of up to $11,000.
  • Failure to report a claim waives the time bar
  • Failure to controvert a claim requires 10% additional compensation for each amount unpaid.

Insurance

  • The Employer may be Uninsured
  • nsured by an unauthorized carrier
  • Insured by an authorized carrier, but have no DBA endorsement
  • Operating under a waiver which is not effective

Insurance

  • The Employer is responsible, not
  • The broker or agent
  • The government contracting officer
  • The insurance company
  • The attorney
  • The Department of Labor

Insurance

  • The Employer is also responsible for all
  • Subordinate contractors
  • Subcontractors

Consequences

  • There are both civil and criminal proceedings for which
  • The company
  • Its President, Treasurer and Secretary
  • Each needs separate representation –
    8 lawyers in all.
  • The compensation case is now a $50m Lawsuit

Consequences

  • The contract was bid without the cost of DBA included.
  • The premiums must be paid without reimbursement

Consequences

  • And this may all be because of a subcontractor, or the subcontractor’s subcontractor.

Consequences

BROKERS

  • You are compensated for providing cover
  • You are at risk of an E & O claim if you do not

Waivers

The Secretary of Labor

  • On the recommendation of
  • The head of
  • Any department or agency
  • In the exercise of her discretion, may
  • Waive the application of this section with respect to
  • Any contract, subcontract or subordinate contract
  • Work location under such contracts
  • Or classification of employees

Waivers

  • Waivers are routinely granted when
  • Submitted by the proper person
  • In the proper form
  • Subject to limits and conditions
  • Waivers apply to Guam for all employees including US nationals.

Waivers

  • Do not apply to
  • US Citizens
  • People hired in the US
  • Legal residents of the US
  • Do not apply unless waived employees will receive compensation under local laws providing for workers’ compensation for injuries, illness or death.

Waivers

  • Each contractor must before commencing performance
  • Provide and maintain
  • For all waived employees
  • Workers compensation insurance as required by the law of the place of the work
  • With no exclusions e.g. for war hazards

Waivers

  • If there is no local workers compensation law
  • Nationals are covered under DBA
  • If a worker is NOT covered by another compensation act for any reason
  • Employers face penalties
  • Brokers face E & O claims
  • If in doubt, buy protection