A local shipyard we work with was recently visited by the loss control manager from the insurance company that writes its United States Longshore and Harbor Workers’ Compensation Act (USL&H) coverage. This was a good visit all around. Although the yard and the insurance company have had a longstanding relationship, recent losses required the insurer to make several large payouts, resulting in a premium increase for the shipyard. This is not good all around.
USL&H premiums are based on payroll and the types of work employees perform. The larger the workforce, the more a company pays. Loss experience is then factored in. The more claims you have, the higher your premium will be. It’s easy to forget about past claims — until you experience a serious case of sticker shock when the premium notice arrives.
For many years, the mindset at many yards has been to “get the job done” — a phrase often seen as a mark of a strong work ethic. But it’s just as important to include the word “safely.” And the expense of a claim does not stop at medical bills. The indirect costs a yard incurs from a claim due to work stoppage, extra paperwork, corrective actions, time lost to injuries, etc., can add up to an additional 66% of unseen costs to your business.
At our local shipyard, the loss control manager presented a spreadsheet covering five years of claims. It detailed the injured body part, the job being performed, and the cost associated with each incident. A subsequent tour of the yard found spots for the safety director to focus on to help prevent future accidents. Suggested changes were made, and a follow-up visit in four months was scheduled.
The insurance company’s loss control manager recognized this long-term relationship and provided valuable (and free) guidance to the insured shipyard to help reduce injuries at the workplace. The hope is that a safer work environment will lead to fewer accidents, fewer claims, and ultimately, lower USL&H premiums. The money saved can be invested elsewhere — clearly, a win all around.
