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Office of Workers' Compensation Programs
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Division of Longshore and Harbor Workers' Compensation (DLHWC)

Insurance Frequently Asked Questions (FAQ)

 

  1. Does the Department of Labor regulate insurance premium rates?
  2. How does my company become an authorized Insurance Carrier or Self-Insured Employer to provide coverage under the LHWCA, or its extensions?
  3. What is an employer or insurance carrier required to do in order to remain authorized?
  4. How do I contact the OWCP regarding insurance authorization and compliance with insurance regulations?
  5. How can I find out whether my business should be covered under the Longshore Act or its extensions?
  6. I am a self-employed maritime worker. Do I have to buy Longshore insurance coverage for myself?
  7. As a covered employer, what are my responsibilities under the LHWCA?
  8. What are the consequences of failure to post the Form LS-241 or LS-242?
  9. How can an employer obtain an up-to-date Form LS-241 or LS-242?
  10. What are the consequences of failure to obtain Longshore insurance?
  11. How can an employer take advantage of payments made by the Special Fund?
  12. What are the funding sources of the Special Fund?

 


1. Does the Department of Labor regulate insurance premium rates?

No. The DOL has no authority to regulate insurance premium rates. All authorized carriers are regulated by the insurance commissioners in the states in which they operate.


2. How does my company become an authorized Insurance Carrier or Self-Insured Employer to provide coverage under the LHWCA, or its extensions?

The OWCP is responsible for the authorization of insurance carriers and self-insured employers. Each employer or insurance carrier must be separately authorized for each Act administered by this office. To request authorization, submit an application to write coverage to:

Branch Chief of Financial Management, Insurance and Assessment
U.S. Department of Labor OWCP/DLHWC
Frances Perkins Building, Room C-4319
200 Constitution Ave NW
Washington, DC 20210

The application forms are available in the Forms section of our website. Form LS-271 (Application for Self Insurance), is for self-insured employers and Form LS-272 (Application to Write Longshore Insurance) is for insurance carriers.

The application package must include the following:

  1. Letter signed by a corporate officer requesting authority to write coverage, including a statement of the company's underwriting intentions;
  2. Statutory Annual Statements for the three most recent years;
  3. Copy of the company's Articles of Incorporation;
  4. Copy of the Corporate by-laws;
  5. Copy of the Certificate of Authority issued by a State insurance department granting authority to write workers' compensation insurance;
  6. Copy of the most recent examination report of the company by a State Insurance Commissioner's office;
  7. Copy of the forms of policies and endorsements that will be used;
  8. The Employer's Identification Number (EIN) for each applicant company. This should be furnished in the letter signed by the corporate officer requesting the authority to write coverage; and
  9. A certification by the corporate officer stating that the applicant company will perform the following:
    1. comply with all statutory and regulatory obligations, including meeting timeliness requirements for paying benefits and reporting information [Section 14(a)-(i)]
    2. utilize the informal dispute resolution mechanisms in good faith by bringing only issues that are ready for resolution (i.e., all documentation is available) and sending representatives who are both prepared and have authority to resolve issues;
    3. participate and cooperate with all efforts by professional and trade associations to self-police industry compliance;
    4. monitor and be held responsible for the performance in items a and b above of their Third Party Administrator (TPA) or other claims handlers; and
    5. respond to all penalty assessments in a timely manner.

The statements of fact and supporting evidence shall be verified by the notarized oath of the officer of the Applicant Company who signs the application.

The Code of Federal Regulations, Title 20, Part 703, contains more detailed information on how to apply for authorization and can be found at Title 20 Part 703.


3. What is an employer or insurance carrier required to do in order to remain authorized?

Authorized self-insured employers and insurance carriers are required to comply with all statutory and regulatory obligations including: meeting timeliness requirements for paying benefits and reporting information [Section 14(a)-(i)]; maintaining security deposits; and submitting various financial reports as specified by the OWCP.

Authorized Insurance Carriers are also required to maintain an A.M. Best rating of B+ or greater.

Authorization remains in effect indefinitely unless a company is found in non-compliance with the requirements of the OWCP. Authorization is not transferrable. Authorized companies are required to notify the OWCP of any changes in ownership, changes in domestication, name changes, etc. The Code of Federal Regulations, Title 20, Part 703 contains detailed information on the requirements for continuing authorization and can be found at Title 20 Part 703.


4. How do I contact the OWCP regarding insurance authorization and compliance with insurance regulations?

All insurance-related matters are handled by the DLHWC National Office, Branch of Financial Management, Insurance and Assessment, located at:

U.S. Department of Labor OWCP/DLHWC
Frances Perkins Building, Room C-4319
200 Constitution Ave NW
Washington, DC 20210

Additional contact information is available in the Contact Us section of our website.


5. How can I find out whether my business should be covered under the Longshore Act or its extensions?

Longshore insurance coverage can be a complex legal question that depends on the nature and location of the work to be performed. The Longshore district office staff may provide general information and guidance regarding the types of work covered by the LHWCA, and its extensions, but their recommendation does not constitute legal advice or a formal adjudication of this issue.

As a general rule for Longshore coverage, if you have employees in traditional maritime occupations such as longshore workers, ship-repairers, shipbuilders or ship-breakers, and harbor construction workers and those employees work on the navigable waters of the United States or in the adjoining areas, including piers, docks, terminals, wharves, and those areas used in loading and unloading vessels, then you should obtain the coverage or seek authorization to become self-insured.

For more information on Defense Base Act (DBA) coverage, please reference the DBA FAQs on our website.


6. I am a self-employed maritime worker. Do I have to buy Longshore insurance coverage for myself?

The OWCP recommends that all coverage questions be discussed with an experienced maritime insurance broker or attorney in order to evaluate any potential liability under the Longshore Act. The LHWCA requires that maritime employers, including sole proprietors who are employees of their own company, obtain insurance for all employees; officers of a corporation are not exempt from LHWCA coverage.


7. As a covered employer, what are my responsibilities under the LHWCA?

You must secure payment of compensation through the purchase of insurance or by obtaining authorization from the OWCP to be self-insured. In addition:

  1. You must post an up-to-date Form LS-241 (if you are insured by a carrier) or LS-242 (if you are permissibly self-insured) at each place where you conduct business. The form should include the name and address of the insurance carrier, the policy number, the person you have designated to receive the employees' notices of injury, and the address of the OWCP/DLHWC Central Mail Receipt site:
  2. U.S. Department of Labor
    Office of Workers' Compensation Programs
    Division of Longshore and Harbor Workers' Programs
    400 West Bay Street, Suite 63A, Box 28
    Jacksonville, FL 32202

  3. You should notify your insurance carrier promptly of all work-related injuries.
  4. You should authorize medical care upon request from the injured worker.
  5. You must submit Form LS-202 (Employer's First Report of Injury or Occupational Illness), to the OWCP within 10 days of your knowledge of any injury which causes loss of one or more shifts, or upon request.

Please see the Document Submission and Communication with OWCP FAQs for more specific information on how claim forms and documents should be submitted to OWCP.


8. What are the consequences of failure to post the Form LS-241 or LS-242?

The posting of the Form LS-241 or LS-242, Notice to Employees, is mandatory. The employer's failure to designate a person to receive notices of injuries from employees and to post this information in a conspicuous place will be grounds for excusing the employee's late reporting of his/her injury.


9. How can an employer obtain an up-to-date Form LS-241 or LS-242?

The Form LS-241 is provided to each insured employer by its insurance carrier. Upon confirmation or renewal of insurance coverage, the insurance carrier should give the insured employer an up-to-date Form LS-241 for posting. The OWCP will supply the Form LS-242 to an employer upon its initial authorization as a self-insured employer.

Because of the nature and purpose of these forms, they are not available for download from the internet. The DLHWC National Office will mail additional blank forms to authorized carriers or self-insured employers upon request. Requests should be directed to DLHWC National Office, Branch of Financial Management, Insurance and Assessment. Contact information is available on our website.


10. What are the consequences of failure to obtain Longshore insurance?

An employer who fails to secure the payment of compensation under the Act through an insurance carrier or to obtain authorization to be self-insured may face criminal prosecution and be subject to imprisonment and/or fines. If the employer is a corporation, the president, secretary and treasurer can be prosecuted individually and may be personally and severally liable for compensation and other benefits.

If the employer is not insured, an injured employee also may elect to either claim compensation under the Act or sue for damages for his/her injury under general tort law. In such a lawsuit, the employer may not rely on the customary tort defenses that the employee is prevented from recovery by (1) his/her own contribution to the cause of the injury or (2) his/her own negligence or wrong-doing.


11. How can an employer take advantage of payments made by the Special Fund?

The employer or insurance company must apply for relief under § 8(f) of the LHWCA and comply with various legal and evidentiary requirements set out in the statute and the regulations. Refer to Section 44 of the Act and Section 702.321 of the regulations.


12. What are the funding sources of the Special Fund?

The Special Fund is primarily funded by annual assessments made by all authorized insurance carriers and self-insured employers, under the LHWCA and its extensions. The annual amount is determined by the formula codified in the Act at Section 44 as follows:

  • {[(Total company compensation paid in the prior calendar year ÷ All compensation paid in that year) + (Total company Special Fund participation in the prior calendar year ÷ All Special Fund participation in that year)] ÷ 2} X Estimated Fund expenses for current year = Company Assessment

Civil penalties paid by employers and carriers under the LHWCA, and its extensions, are also paid into the Special Fund. For more information, refer to Section 44 of the Act and to the implementing regulations.