The U.S. Department of Labor on Feb. 6 published a notice providing enhanced and transparent guidance for calculating the amount of securitization required by insurers writing policies under the Longshore and Harbor Workers' Compensation Act.
“This new guidance represents a transparent and structured approach that will lower the cost of doing business for industries vital to America’s economic and military dominance while continuing to put injured workers first,” according to a statement from the Department of Labor. “It will also improve industry confidence regarding potential liabilities and how to improve their outcomes.”
Factors considered by the policy include companies’ financial health, experience writing LHWCA policies, and how quickly they pay accepted claims for injured workers.
“As we restore America’s maritime and energy dominance, the Department of Labor continues to put American workers’ safety and health first,” said Secretary of Labor Lori Chavez-DeRemer. “These guidelines will protect workers while creating a fairer environment for businesses that do vital work for our country.”
The new framework aims to protect injured workers “while reducing the burden on job-creating industries and promoting economic growth,” according to the department statement.
Administered by the department’s Office of Workers’ Compensation Programs, the LHWCA and its extensions require private-sector firms to provide workers’ compensation coverage for their employees engaged in covered positions. Insurance companies that are approved by the Office of Workers’ Compensation Programs to write policies under the acts must provide appropriate security to the department for their liabilities.
“While the LHWCA has always allowed companies to reduce their security burden if they meet certain risk- and performance-based criteria, action has never been taken to provide this relief,” according to the department.
Labor officials say the new guidance is in line with other Trump administration moves to revitalize U.S. maritime construction, reducing “the economic and regulatory burden on shipbuilders by lowering the cost of insurance and helping American-built ships to better compete with foreign competitors.”
