Marine Employer's Liability vs USL&H: What's the Difference?

If you are a marine employer operating globally, understanding your insurance coverage is critical. Unfortunately, there is a lot of confusion around two important policies: Marine Employer's Liability (MEL) and United States Longshore and Harbor Workers' Compensation Act (USL&H) coverage. Many companies assume they are protected by one when they actually need the other, or both. This misunderstanding can leave your business dangerously exposed.

Let's break it down clearly so you can confidently protect your team and your operations.

What Is Marine Employer's Liability (MEL)?

Marine Employer's Liability insurance is designed to protect employers when their crew members suffer injury, illness, or death outside the scope of traditional workers' compensation or Protection and Indemnity (P&I) coverage.

MEL often comes into play when workers are employed on vessels but are not covered under maritime laws like the Jones Act. It typically covers legal defense costs, settlements, and damages for which the employer may be held liable.

According to the International Risk Management Institute (IRMI), MEL is intended for "employers who do not have U.S. citizen seamen covered under the Jones Act" (IRMI, 2024). This is especially important for businesses employing foreign crew, working internationally, or operating on a variety of different vessel types.

What Is USL&H Coverage?

USL&H insurance refers to the United States Longshore and Harbor Workers' Compensation Act. This federally mandated coverage protects land-based maritime workers like longshoremen, harbor workers, shipbuilders, and ship repairers. These employees are not considered seamen and are not eligible for Jones Act protections, but they perform critical duties related to vessels.

The U.S. Department of Labor describes USL&H as providing "medical care, compensation for lost wages, and rehabilitation services" for employees who are injured while working on navigable waters or in adjoining areas like docks and shipyards (U.S. Department of Labor, 2024).

If your employees ever step foot onto a pier, dry dock, or wharf for work, you could be required to carry USL&H coverage, even if you mainly think of them as vessel workers.

Key Differences Between Marine Employer's Liability and USL&H

While both policies protect employers against liabilities related to employee injuries, they apply to very different circumstances:

• Marine Employer's Liability covers crew working on a vessel, typically offshore or at sea.
• USL&H covers land-based maritime workers or employees working near vessels but not considered "crew."

Confusing the two can lead to serious gaps in coverage. For example, an employee injured while prepping a vessel in dry dock could trigger a USL&H claim. If you only have MEL coverage, you might be left with the bill.

According to the American Equity Underwriters, "the absence of USL&H coverage when needed

can result in substantial financial penalties and exposure for employers" (American Equity Underwriters, 2023).

Why the Confusion Happens

Many marine employers think that if they have a general marine insurance policy, it covers everything related to the ocean, the ship, and the employees. However, that is not the case.

Insurance policies are written to be very specific about who is covered, where they are covered, and under what circumstances. MEL and USL&H were created because maritime work environments are so unique and risky that standard workers' compensation policies just do not fit.

A Global Challenge for Marine Employers

This confusion is not limited to U.S. companies. Marine employers around the world face similar challenges. In Europe, for example, maritime laws and insurance standards vary greatly by country. The European Maritime Safety Agency emphasizes that "national regulations differ considerably," making it essential for marine employers to understand not only their local laws but international insurance obligations as well (European Maritime Safety Agency, 2022).

If you are hiring globally, operating vessels internationally, or even just docking in different ports, you must ensure your insurance program meets the right standards everywhere you go.

How MHG Insurance Can Help

For more than 30 years, MHG Insurance has been helping marine employers navigate the complex world of marine insurance. We understand the challenges you face because we live and breathe marine insurance every day. Our team specializes in finding the right coverage that fits your operation, wherever it takes you.

Marine insurance is not just a product. It is a critical piece of your business continuity plan. And when it comes to protecting your employees and your company, there is no room for guesswork.

Do not leave your coverage to chance. Let MHG help you review your current policies, identify any gaps, and build a comprehensive insurance program that gives you peace of mind.

Final Thoughts

The difference between Marine Employer's Liability and USL&H insurance might seem small, but it is crucial. Having the right coverage means protecting your employees, staying compliant with legal requirements, and safeguarding your business from potentially devastating financial losses.

Contact MHG Insurance today for a free consultation and ensure your marine insurance coverage is shipshape: https://mhginsurance.com

Sources (with URLs)

• IRMI (2024). "Marine Employers Liability (MEL) Insurance." https://www.irmi.com
• U.S. Department of Labor (2024). "Longshore and Harbor Workers' Compensation Act." https://www.dol.gov/agencies/owcp/dlhwc/lsfaqs
• American Equity Underwriters (2023). "Understanding the Basics of USL&H Insurance." https://blog.amequity.com/understanding-the-basics-of-uslh-insurance
• European Maritime Safety Agency (2022). "Maritime Legislation in the EU." https://www.emsa.europa.eu/legal-framework.html

The maritime industry is full of adventure, but it's also full of risks. Whether you're repairing ships, operating a marina, or managing cargo logistics, you're working in an environment where the unexpected can (and does) happen. That's why Marine General Liability (MGL) insurance isn't just a good idea; it's an absolute necessity.

At MHG Insurance , we have been helping businesses navigate marine insurance for over 30 years. Our expertise ensures that maritime professionals have the right coverage for their unique needs so they can focus on running their operations with confidence.

What is Marine General Liability?

Marine General Liability insurance is designed to protect businesses that operate in or near water. It provides coverage for bodily injuries, property damage, and pollution liability-risks that standard Commercial General Liability policies often exclude. In short, MGL is built specifically for the marine world, covering the risks that come with shipyards, docks, vessels, and everything in between.

One of the most critical aspects of MGL is its care, custody, and control coverage. This means that if you're a ship repairer, stevedore, or marina operator or any other conventional marine trade, working on someone else's vessel or cargo, you're covered if an accident happens while it's in your possession. Without this specialized protection, your business could be left high and dry in the face of costly claims.

Who Needs This Insurance?

If your business operates in a marine setting, MGL isn't optional; it's essential. Ship repairers performing alterations or maintenance on vessels need MGL to cover damages while the ship is under their care. Marina operators rely on it to help protect against claims by vessel owners docked or moored at their location.

Stevedores and terminal operators, responsible for loading and unloading cargo, also face unique risks that require specialized coverage. Boat builders and marine construction contractors also need MGL to ensure they're protected against property damage or injuries that could occur on-site.

Without the right coverage, a single claim could result in major financial losses, whether it's from a minor accident or a catastrophic incident. MGL acts as a safeguard, ensuring that maritime businesses stay afloat even in turbulent waters.

Marine General Liability vs. Commercial General Liability

One of the biggest misconceptions business owners have is assuming that a standard Commercial General Liability policy will protect them in a marine environment. However, CGL policies are designed for land-based businesses and typically exclude claims arising from property in their care, custody, and control and any liability arising from the ownership/operation of watercraft.

Marine General Liability is tailored specifically to maritime operations, covering risks that traditional CGL policies won't touch. For example, if you're installing navigation equipment on a yacht or welding on a cruise ship, a CGL policy wouldn't cover damage to the vessel. MGL, on the other hand, is designed for these exact situations.

Simply put, if your business operates on land, CGL is what you need. If you work in the marine industry, MGL is the only way to ensure you're properly protected.

What Does MGL Cover?

MGL covers a wide range of incidents that can occur in maritime settings. If a customer slips and falls at your marina, MGL helps to cover legal fees and medical expenses. If you're repairing a yacht and accidentally damage the hull, MGL ensures you're not left paying out of pocket.

It also provides limited coverage for pollution liability, which is particularly important in the marine industry. If an accident results in an oil spill or hazardous material leak, cleanup costs and environmental damages can be astronomical. MGL helps mitigate those financial risks so that your business isn't sunk by a single mistake.

Another key coverage area is contractual liability. Many shipyards, ports, and vendors require businesses to carry specific insurance before they can begin operations. MGL helps you meet those requirements while also offering protection in case of disputes or unforeseen damages.

What Marine General Liability Doesn't Cover

While MGL provides broad coverage, it's not a catch-all solution. It does not include any liability arising from injury to employees or independent subcontractors. A Worker's Compensation policy is needed to cover this exposure. It also doesn't cover Hull & Machinery insurance, meaning you'll need additional coverage for physical damage if you own and operate vessels.

Professional liability, also known as Errors & Omissions (E&O) insurance, isn't included in MGL either. If you provide consulting, design, or engineering services, you'll need E&O insurance to protect against claims related to negligence or faulty recommendations.

Understanding these exclusions is crucial for ensuring your business isn't left exposed. Pairing MGL with the right complementary policies helps to create a secure safety net.

How Much Does a Policy Cost?

The cost of an MGL policy will vary based on several factors. The nature of your operations plays a significant role; ship repairers, for example, face different risks than marina operators. The primary rating factor under a standard MGL policy is your business's estimated revenues, which should include both sales generated from manual labor and sales generated from the sale of parts and materials. The size and scope of your business and your claims history can also impact pricing.

Coverage limits and deductibles can affect costs as well. Higher limits provide more protection but may come at a higher premium. Companies that implement strong risk mitigation measures, such as safety training and environmental protections, may be able to lower their costs by demonstrating lower exposure to claims.

While the price of an MGL policy depends on multiple variables, one thing remains constant: the cost of not having coverage can be far greater. Without MGL, a single accident or liability claim could lead to financial devastation.

Why You Shouldn't Operate Without MGL

Marine businesses operate in one of the most challenging environments in the world. Water, weather, and human error all create an unpredictable mix of risks. Without the right insurance, a routine job can turn into a financial disaster overnight.

Marine General Liability ensures that businesses are protected from the unique risks of the maritime industry. It covers accidents, injuries, property damage, and environmental incidents that could otherwise jeopardize operations.

For over 30 years, MHG Insurance has been a trusted expert in marine insurance , providing tailored solutions for businesses in the industry. Whether you need Marine General Liability, Marine Employer’s Liability , a Bumbershoot policy , or USL&H coverage, our team will assess your risks and help you secure the right protection to keep your business covered while meeting insurance requirements. Contact us today to learn more about coverage options and to get a quote!

Cruises are made to be a fun memorable vacation that individuals, couples, and families can remember for years to come. A major part of the cruise industry are excursions. As Tour and Excursion Operators know, one of the first things guests do when stepping onboard a cruise ship is to book all the excursions they plan to take part in. While excursions are often considered one of the most fun parts of going on a cruise, there are still liabilities, and accidents that can happen, which is why waivers should be signed, and you should be insured! Below are some of the most common injuries reported by Tour and Excursion Operators.

Snorkeling

We were notified of 2 separate incidents where the individuals both suffered fatal heart attacks whilst snorkeling. Both had long term medical histories which showed it was effectively ‘natural causes’ and no law suit was filed.

Diving

Seeing the world under the surface of the ocean is amazing. However, there is heavy and expensive equipment involved with scuba diving. Luckily, many places will not let people dive without a proper license, but that doesn’t mean you still aren’t exposed to liabilities upon injuries. For instance, what if someone doesn’t come up to the surface properly?

Animal Bites

Many of the top attractions and excursions throughout the Caribbean include swimming with a variety of sea creatures. Whether it be dolphins, sharks, sting rays, or other fish, accidents can happen, and there have been reports of people getting bitten or stung.

Jet Skis

Jet skis are one of the most thrilling and exciting excursions that people choose to partake in. While they can be a very enjoyable time, such thrills and excitement can come at a cost. Improper use of Jet skis has been responsible for tragic crashes, injuries, or even worse. One of the main causes of this stems from inexperience of the individual that is operating the craft, who aren’t well versed in the rules and laws of the water when it comes to other boats or vessels in the area.

Zip Lines

Last but not least, many believe that the most frequent injuries are sustained on zip lines. While you may be thinking that many of the injuries occur because of a fall that is not necessarily the case. Far more common, is injury that is sustained when reaching the end of the line and impacting against poorly maintained equipment at speed.

Now that you are further aware of some of the accidents that can happen in the Shore-Ex industry, cover your liabilities with Shore Excursion insurance, also known as Tour and Excursion Operators Liability Insurance. Shore-Ex Insurance is a package contingent liability program designed specifically for tour operators seeking to work with the cruise line industry. If you are interested in purchasing a Tour & Excursion Operators Legal Liability Policy, or simply need some more information contact us at mhginsurance.com or call us at +1 954 828 1819 or +44 (0) 1624 678668. Our team of brokers have the knowledge and experience to consult with you on the best coverage for your budget, and can also assist you with any insurance questions you may have.

Shipyard owners are concerned with protecting their businesses from exposure to financial damage, especially in the form of lawsuits and liability issues. As part of their ongoing efforts to insulate their businesses from harm, these conscientious proprietors are checking to make sure that the firms they do business with meet all insurance coverage requirements. If your maritime business lacks the necessary USL&H coverage, you could find yourself facing the harshest of penalties – including the loss of valuable contracts, the imposition of stiff fines, and even actual jail time!

Does your business have the USL&H coverage it needs? Find out by perusing this handy guide on the key facts of Maritime Workers Compensation coverage:

USL&H Is a Requirement to Work on Board Vessels 65' or Greater in Length or at a Dock, Port, or Shipyard

USL&H, which refers to the Longshore and Harbor Workers’ Compensation Act, was enacted to provide compensation to employees in the event of their injury or death while performing maritime work on board a vessel or at a dock, port, or shipyard on navigable waters of the United States. USL&H is federally mandated, which means companies that fail to obtain Maritime Workers Compensation coverage as required are subject to stiff penalties that can include fines of up to $10,000 and incarceration in prison for a year. Even more seriously, uninsured employers and company officers may also be held personally and severally liable for compensation and any other benefits that may accrue to an injured employee.

USL&H Is Workers' Comp Coverage for Contractors Working on/with Vessels

USL&H coverage provides benefits similar to Workers' Compensation to contractors performing any maritime work on or with vessels on navigable waters of the United States. Accidental injuries, occupational diseases, and death arising from the employee's employment are covered by Workers' Comp; similar benefits accrue to maritime employees under USL&H coverage. Even contractors’ employees who have "incidental USL&H" exposure, such as electricians, heating and AC contractors, flooring installers, and other personnel performing repairs on equipment located on a boat, are covered under Maritime Workers Compensation if they suffer any damage while performing their duties.

Shipyards Can Require USL&H Coverage for Even a Single Employee

While USL&H benefits are similar to benefits provided by Workers’ Compensation Insurance, the rules are far more stringent. Workers’ Comp is only required for businesses with four or more employees in Florida, other states may vary, including owners unless they are exempt. Contractors that fall under USL&H guidelines, however, need to provide coverage even if only one employee at their company will be performing qualifying work.

Carrying Inadequate Marine Insurance Coverage Can Be Costly

In addition to Maritime Workers Compensation benefits, MHG Insurance Brokers also provide marine general liability insurance, which protects you in the case of liability or property damages to a third party while engaged in marine related operations. Marine general liability insurance is an absolute necessity for any business providing repair or other services on vessels, as even seemingly minor damage to a boat can prove to be expensive. Now that you know the relevant details about USL&H – shipyards are checking if you have it, Federal law requires you to carry it, and there are stiff penalties for companies that do not have it - the experienced Insurance Specialists at MHG Insurance Brokers can help you obtain the USL&H policy that best suits your needs.

At MHG, we understand the unique environmental conditions of working on the sea, as well as the accompanying challenges. We strive to help marine companies find the best, most affordable coverage to suit their requirements.

To learn more about USL&H coverage, marine general liability insurance, and other marine insurance plans, call MHG Insurance Brokers at +1 954 828 1819 or visit us online at mhginsurance.com