And the Award Goes To…

MONDAY, OCTOBER 24, 2022

1800 – 2100         Meet The Speakers Reception
The Westin Ft. Lauderdale Beach Resort Convention Ctr | The Atlantic Ballroom

TUESDAY, OCTOBER 25, 2022

0700 – 0800          Continental Breakfast
The Westin Fort Lauderdale Beach Resort Convention Center | The Las Olas Ballroom

0820 - 0915            It’s A Jungle Cruise Out There

From experience, we have learned that only occasionally is a failure or other calamity precipitated by events that occurred in the immediate moments prior to something bad happening onboard or ashore.  Usually, there is a back-story. Things that happened (or did not happen) hours before, days or even weeks before can set the stage for the ensuing incident or disaster. The concept of Limitation of Liability relies on everything being perfect up to the time of the incident, but how perfect can everything be under all circumstances?  

Safety warnings, safety training, safety policies, safety devices, protective clothing. Think-Safe signs are posted everywhere. Yellow safety walkways, flashing warning lights, interlock devices, protective guards. Do all of these things truly make the workplace safe, or do they set the stage to hang yourself when it is impossible to comply with your own safety standards? What is “safety culture”? Does it work? If all of the boxes are checked on the checklist, is your client in compliance? 

The two most common phrases taught to new and experienced employees are Stop Work and Job Safety Analysis (JSA). Investigators and compliance auditors see these concepts so misused that some have adopted the terms JSA Fatigue and Safety Fatigue. Does your client’s Safety Management System do the job it is intended to do? both the litigator and vessel manager  viewpoint does the company SMS actually reduce risks?  Small mistakes, and the failure to follow your own policies or mandated regulations may lead to big consequences when a failure occurs or crew are injured.

0915 - 1010            The Good, The Bad, and The Ugly 

How much is enough? Are insurers providing the right coverage for what is being insured? Establishing the level of risk is a complicated process not often understood by vessel owners, operators, charterers and sometimes insurers too. Let’s look at examples that focus on the modern, high-tech, packed-with-gadgets sport boat and express cruisers. How do we evaluate damages, cost of repairs and residual values?

A contemporary 40-foot center console can be valued about the same as a 70-foot flybridge cruiser of 20 years ago. Small modern vessels are complex machines with similar technology to today’s high-end automobiles.  Why does a simple grounding of a small composite boat that sustained what appears to be minor hull damage become a CTL?  In years past, we cut out the bad stuff, grind it back to undamaged material, mix a batch of polyester resin in a coffee can and enjoy getting high on vapors while we fill the offending hole with layers of fiberglass fabrics. Not so easy for the contemporary vessel. High-tech resins, fabrics, core materials and sophisticated curing processes. Complex shapes, adhesives instead of mechanical fasteners, lightweight construction with minimal scantlings, impressive strength to weight ratios and a battery of electrical and electronic devices.  

From many a surveyor’s viewpoint, it simply cannot be repaired back to the pre-loss condition. From the owner’s viewpoint, he/she do not want anything but a replacement vessel.  The manufacturers don’t want to fix it because their name is on it. And, how many repair yards can actually restore it to the pre-loss condition for a price that is reasonably below the total loss claim? 

However, the new boat market is driving boat prices up. This drastic change in values now offers that “repair” is a viable option when just three or four years ago, it was not. Factors include labor, supply chain for new boat parts, and dealership inventory (new and used).  Is this a perfect recipe for heavily damaged vessels to now be viable for repair? Or is this a formula for future problems for vessel owners and insurers?

1010 - 1030            Morning Break

1030 - 1100            Keynote Address: State of the Industry

We always discuss the changing times, but some things stay the same and others do not. Ships blocking the Suez Canal, a global Pandemic, war in the Ukraine to name a few. And what about the notion that perhaps only 1% of the world population even knew the term “supply chain” just a few years ago? And then we have INSURANCE, what is it, what does it mean and where does it fit into the complicated cogs of our modern lifestyle and economy? Has insurance changed significantly in the last decade or is it still the same, running in the background, paying large and small claims as it always has, faithfully, quietly and reliably?

1100 - 1155            The Perfect Claim  

A USCG-credentialed Merchant Mariner on a U.S. Flag Jones Act compliant tank vessel owned by a Connecticut ship owner and managed by a Florida Corporation is injured during cargo operations in Galveston, Texas. Can he/she make a claim under the Jones Act? Of course!  

What about a Croatian seaman employed on a Bahamas Flag cruise liner, owned by a Panama Corporation and managed by a Norwegian entity with offices in Miami Florida? He/she was operating a lifeboat in Port Canaveral for required in-water testing and was injured. Can he/she make a claim under the Jones Act? 

On the other front (recreational vessels), we have the concept of day workers versus full time crewmembers. Scenario: She was hired as a part-time dayworker to clean the interior spaces after a shipyard refit. She was then asked to take care of the “Heads and Beds” when the owners were aboard for weekends in the Keys and Bahamas.  She did this task periodically on three other boats for three other captains!  Where did she live? In a local crew house with other ex-pats looking for full time employment. One day, docking the boat at a popular waterfront restaurant, she fell and was injured when the vessel bumped the dock hard.  How did a dayworker with no contract and no seaman credentials suddenly become a crewmember with the ability to make claims against the vessel under the Jones Act? Having Jones Act status has many ramifications beginning with the basic maintenance and cure requirement up to, and including, litigation in the U.S. Federal Court system.

1155 - 1200           Announcements

1200 - 1330           Lunch Buffet

1330 - 1430           Risky Business

Always remember you can’t bind insurance over the phone by voice mail.  Or in a text!

What is the client signing? We start with an agent, then broker, then insurer. Who decides what is best for the client and who takes responsibility for what liability when things go wrong? How do we ensure the chain of important information is not broken or lost along the communications process? Could there be too many layers and too much protection by the insurer from liability? Tailoring a contract to meet the client’s requirements may sometimes be best accomplished by eliminating ambiguous wording and getting right to the point. Less trip hazards and less confusion should lessen the risk of Error & Omission (E&O) Claims and simplify the process for the insured, insurers and when needed, legal counsel. E&O Claims often occur when the parties fail to communicate, fail to properly evaluate the risk, and either short cut or side-step the matrix of responsibilities between the parties. 

Like any business transaction, the contract of insurance should be equitable and beneficial to all the parties involved. Have we lost sight of this concept? Are insurers providing the coverage to protect the client against potential losses while still retaining “reasonable” exclusions and deductibles?  Insurance policies cannot be a one-sided affair that is only favorable to the insurer any more than the all-risk policy can be drafted without certain exclusions.  Each risk is different but why are the contracts the same?

1430 - 1530          A Funny Thing Happened On The Way To The Boatyard

It is common practice when a vessel enters a shipyard or marina that the person in charge signs the work or dockage agreement on behalf of the vessel. But do they read the fine print? Have they entered into a Bailment or not? Do they understand that they are often making a pledge of responsibility for their insurer and the insurer has no idea that this has occurred?  A simple hot-work task during a one-week haul out can become a multi-vessel and property damage disaster.  Has a JH 143 – Shipyard Risk Assessment been conducted periodically or for the specific job? Another consideration is the shipyard history. We should also look at the changing demographic of shipyard and marina ownership with the recent increase in consolidations by large national facility owner/operators.

Coverage and premiums must be tailored to the haul-out program so that insurer and the vessel understand what is covered and that said coverage is comprehensive to the work. Basically, there should be no surprises when something goes wrong. The shifting of liability with a signature is too easy, but the ramifications after an incident are hard, cold, and expensive. Consider that when the insurance dollars run out, your client (the vessel owner) may be on the hook for the rest. How should the agent or broker ensure there is proper coverage and who is responsible for the signature on the bottom of the work agreement?

1530 - 1600            Afternoon Break

1600 - 1700            The Hunt For Policy Wording

The concepts surrounding Navigation Limits under war risk clauses have changed significantly due to very recent world events.  Economic sanctions being levied against parties associated with the war in Ukraine may support the idea that a war zone includes the 24,000-mile circumference of the earth instead of a no-sail zone marked on a nautical chart.  

Being near the “fighting” is a self-explanatory war risk, but what about when a vessel is seized for economic reasons associated with a conflict thousands of miles away while berthed in a safe port?   Does the citizenship of the Beneficial Owner or a flag of convenience protect the vessel or affect the level (perception) of the risk? Who is the controlling entity and how can multiple layers of corporate protection be pierced to identify, pursue, and attach to the real owner? Is it time to revisit the war risk clauses, the application of navigation limits and perhaps the concepts surrounding force majeure? 

1700 - 1715            Closing Remarks / Vacation Raffle

1715 - 2000            Cocktail Reception