Risky Business Page 3

Risky Business

Don’t Forget Crew Liability

By Mike Smith — July 2004

 More of this Feature

• Part 1: Offshore Insurance
• Part 2: Offshore Insurance
• Don’t Forget Crew Liability

 Related Resources
• Feature Index

If you employ crew, talk to your insurance broker and your lawyer to determine if you and your vessel are subject to the Jones Act. If you are, and one of your crew is injured, you could be sued in federal court, just like the owner of a commercial ship could be in similar circumstances. Not only is federal litigation expensive, but damages awarded under the Jones Act can be steep.

The Jones Act, section 27 of the Merchant Marine Act of 1920, requires that an employer compensate a seaman injured onboard for “transportation and wages” until the end of the voyage and “maintenance and cure” afterwards, until recovery. However, if the injury was caused by the owner’s negligence, the seaman can sue for damages, including pain and suffering, lost wages, lost earning capacity, etc. The law also provides benefits for injuries caused by an “unseaworthy” vessel; both vessel and crew are considered when determining seaworthiness.

The act applies to most U.S.-flagged vessels, commercial and private, with some exceptions for crew who are not citizens or resident aliens of the United States. On the other hand, the act’s definition of “seaman” is broad. The courts consider a “seaman” under the Jones Act to be anyone permanently assigned to a vessel, or who performs a substantial part of his work aboard a vessel and who contributes to the function of the vessel, “in the accomplishment of its mission,” or the operation and welfare of the vessel.

Laws similar to the Jones Act are on the books of almost every maritime nation, however, so registering your yacht outside the United States and hiring foreign crew may not get you off the hook. Talk to your maritime lawyer about this. —M.S.

Previous page > Part 2: “It has to do with individual risk. Obtaining insurance depends on the past experience of the boat owner.” > Page 1, 2, 3

This article originally appeared in the June 2004 issue of Power & Motoryacht magazine.

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