Marine License Insurance: Do You Need It?
Imagine working aboard a vessel and, suddenly, you’re involved in a maritime accident that triggers a Coast Guard investigation. In the blink of an eye, your career and Coast Guard license are in serious jeopardy. Every year, this scenario is reality for professional mariners throughout the U.S. Fortunately, marine license insurance can change that.
What Is Marine License Insurance?
Marine license insurance is a pre-paid legal defense insurance policy that provides policyholders with legal representation by a local maritime attorney in the event of a covered shipping casualty or incident. This coverage is designed specifically to protect the licenses and livelihoods of professional mariners, such as U.S. Coast Guard-licensed deck and engineering officers, certified tankermen, as well as state and federal pilots, operating aboard vessels of any size in every sector of the industry.
What Types of Events Are Covered By License Insurance?
Typically, the types of events covered by license insurance are shipping casualties and incidents triggering a Coast Guard investigation. These investigations can result in negligence charges against involved officers who can face suspension or revocation of their license(s). These casualties include, but are not limited to: accidental strandings, sinkings, fires/explosions, collisions, allisions, oil product spills, groundings, heavy weather damage and wake damage.
Why Consider License Insurance Coverage?
Most marine license insurance claims involve, at a minimum: an accident scene investigation, including an “informal” Coast Guard interview; the requirement to complete and submit a 2692 Marine Casualty Report by the involved mariner; a subsequent formal Coast Guard interview at the local Marine Safety Office; and, if charged, potential lengthy proceedings in administrative court.
Without license insurance coverage, an affected mariner could pay upwards of $300 per hour for legal counsel for the duration of the case. This can amount to tens of thousands of dollars.
However, if the mariner has his/her own license insurance or employer-provided license insurance, the total annual premium for coverage is typically less than two or three hours of legal fees, and the policy provides fully-paid defense from onset of the incident to the conclusion of the case.
Is It In An Employer’s Best Interests To Provide Its Officers Coverage?
In general, it is in an employer’s best interests to provide coverage to its officers. Each company has its own philosophy when it comes to providing fully or partially paid benefits to its employees. However, providing affordable license insurance to its officers often becomes a win-win situation. Firstly, a successful defense of an officer’s license keeps him/her on the active roster and secondly, the appreciation and resulting loyalty helps to not only retain good employees, but also helps attract qualified new ones.
A Case In Point
A good example of why professional mariners need license insurance is illustrated in A Rush to Judgment Can Be Costly (www.mopslicenseins.com/maritimes-a-mops-blog/rush-to-judgment), which describes the turmoil a ferry boat captain endured after being blamed for a mechanical failure incident.
Article submitted by MOPS Marine License Insurance.