USL&H, the Jones Act and maritime employers liability explained

A state workers' comp policy does not pay for every injury on or near the water. Workers on the docks, piers and shipyards of the U.S. fall under the federal Longshore and Harbor Workers' Compensation Act (USL&H or LHWCA), and crew members of vessels fall under the Jones Act and general maritime law, which let the injured worker sue the employer for negligence. Each needs its own endorsement on the standard NCCI policy, and getting the mix wrong leaves an employer with an uninsured exposure and a premium audit surprise.

Three regimes, one waterfront

The Department of Labor's Office of Workers' Compensation Programs (OWCP) administers the LHWCA. Employers "shall secure the payment" of compensation under 33 U.S.C. 904(a), and the Act treats an authorized insurer or a self-insurer as the "carrier." So an LHWCA employer buys the coverage, qualifies to self-insure, or is liable directly.

Who is covered by the Longshore Act

Coverage turns on two tests that the standard commentary calls status and situs.

• Status. The worker must be a maritime employee: longshore workers loading and unloading, harbor workers such as ship repairers, shipbuilders and ship breakers. Section 902(3) of the Act excludes categories including clerical, security and data-processing staff, restaurant, museum and retail workers, and certain marina and small-vessel workers; several of those exclusions apply only when the worker is covered by a state comp law.
• Situs. The injury must occur on the navigable waters of the U.S. or on an adjoining pier, wharf, dry dock, terminal or similar area customarily used for loading, repairing or building a vessel.

A worker has to pass both. Being near water is not enough, and a warehouse worker far from the berth usually is a state-comp employee. Borderline cases are litigated constantly, which is why employers with marine-adjacent operations often buy the endorsement as a precaution.

What the Act pays

For the federal year October 1, 2025 to September 30, 2026, DOL set the national average weekly wage at $1,041.35, which makes the maximum weekly compensation rate $2,082.70 and the minimum $520.68. For October 1, 2026 to September 30, 2027, the figures are $1,081.96, $2,163.92 and $540.98 (DOL OWCP, National Average Weekly Wage page). The maximum is 200% of the national average weekly wage, and the minimum for total disability is 50%. Section 906(a) imposes a three-day waiting period, which falls away if disability lasts more than 14 days. Many state comp maximums are lower than the LHWCA maximum, so a federal claim is often more expensive than the same injury under the state act, and the premium reflects that.

Extensions of the Act

Other federal and state programs borrow the LHWCA's benefits. NCCI's education materials list the Defense Base Act (workers on overseas defense bases and under U.S. government contracts), the Nonappropriated Fund Instrumentalities Act (morale, welfare and recreation workers on military installations) and the Outer Continental Shelf Lands Act (work on the Outer Continental Shelf exploring for or transporting natural resources). Contractors in those fields buy the USL&H endorsement too, often with a different state or country schedule. See insurance requirements for government contractors for contract-driven requirements.

The Jones Act and seaman status

The Jones Act, 46 U.S.C. 30104, gives a seaman the right to "bring a civil action at law, with the right of trial by jury, against the employer." It is a negligence statute, modeled on the Federal Employers' Liability Act for railroaders, not a no-fault comp system. An injured seaman can also recover maintenance (living expenses) and cure (medical care) regardless of fault. NCCI shorthand for the no-fault part is transportation, wages, maintenance and cure.

Who is a "seaman" is a fact question. Under the Supreme Court's decision in Chandris, Inc. v. Latsis, 515 U.S. 347 (1995), a worker generally qualifies when he or she contributes to the function or mission of a vessel in navigation and has a connection to a vessel or fleet that is substantial in duration and nature. Courts often cite a rule of thumb that a worker who spends roughly 30% or more of working time on vessels may qualify. A shore-based worker who moves onto a vessel for part of the year can therefore flip from the LHWCA, or from state comp, to the Jones Act, which is why marine employers write job descriptions carefully.

The employer's coverage for seamen is normally a P&I policy, because the exposure is a tort lawsuit with unlimited damages, not a statutory schedule. Standard comp Part Two, employers' liability, excludes maritime employment, so the Jones Act exposure does not fall back on it. When P&I does not exist or does not cover all crew, the maritime endorsement WC 00 02 01 and the voluntary comp maritime endorsement WC 00 02 03 are the NCCI forms that fill the gap.

Endorsements and rating

NCCI treats the federal acts as endorsements to the standard policy.

1. USL&H (WC 00 01 06). Adds LHWCA benefits and the related employers liability, for employees in maritime employment other than masters and crew of vessels, for the states listed on the schedule.
2. Maritime coverage (WC 00 02 01). Extends the policy to maritime liability under the Jones Act and related law, with a premium charge for transportation, wages, maintenance and cure.
3. Voluntary compensation (WC 00 02 03 for maritime; WC 00 03 11 for others). Provides statutory benefits to employees not otherwise required to be covered.

Because the benefits are higher, the rating differs. According to NCCI's Basic Manual (Rule 3-A-4) as described in NCCI's 2016 educational materials, there are two methods. Some class codes carry an "F" suffix (code 7350F, "Freight handling NOC" under the LHWCA, versus code 7360 under state acts) and have their own rates. For other industrial codes, such as 5403 in the NCCI example, the state rate is multiplied by an LHWCA factor. NCCI's illustration used Florida's January 1, 2014 rates, where the factor 2.21 raised an $11.96 rate to $26.43. That example is from 2014, illustrates the mechanism and is not a current figure. The factors and rates are filed state by state, and USL&H experience is kept separate from state experience because the benefits are different.

Premium auditors check payroll by location and job. If your auditor finds payroll for dock work coded to a state class without the USL&H load, expect additional premium for the period, and possibly a coverage question on a claim.

Worked example (hypothetical)

Say a Gulf Coast marine contractor has 60 employees: 20 repair vessels at a shipyard, 10 fabricate steel in a shop two miles from the water, 15 crew company-owned crew boats, and 15 are office and sales staff.

• The shipyard workers are likely maritime employees on a covered situs and need the USL&H endorsement, with F-coded or factor-loaded rates.
• The fabrication-shop staff are probably state-comp employees, unless some work shifts to the pier.
• The crew-boat crews are likely seamen. Their exposure belongs under P&I or the maritime endorsement, not Part One.
• The office staff stay in the state's class code.

If the policy has no endorsement and the yard workers' claims arrive under the federal act, the employer faces an uninsured liability. The broker's task is to match each group of employees to a regime before the policy is bound.

Practical steps for employers

• Draw a map of where each job is done, on what, and for how long, and share it with your broker and the auditor.
• Ask the carrier to confirm in writing which endorsements apply, to which states and which workers.
• Pair the comp policy with marine coverage, such as P&I and hull, through a marine specialist. See ocean marine and cargo insurance: how shipment and vessel coverage works and workers' comp and benefits requirements by state for the state side, including Texas and Louisiana work.
• Remember that Washington is an exclusive state fund state: waterfront employers there deal with L&I for state-act coverage and arrange LHWCA cover separately. See Monopolistic state funds: workers' comp in ND, OH, WA and WY.

Key takeaways

• State comp, USL&H and the Jones Act are separate regimes, and each needs its own policy language.
• USL&H covers maritime workers injured on navigable waters or adjoining shore areas, with wage-loss benefits at 66 2/3% of average weekly wage up to 200% of the national average weekly wage ($2,082.70 a week through September 30, 2026; $2,163.92 from October 1, 2026).
• Jones Act seamen can sue their employer for negligence, so vessel crews are insured under P&I or the maritime endorsement, not standard Part Two.
• Rating uses "F" class codes or an LHWCA factor on state rates; check the filed rates for your state.
• Define job duties and locations clearly, because status and situs, not job titles, decide coverage.