Page 32: of Marine News Magazine (November 2015)

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INSURANCE

License Defense as a Recruiting Tool

The effort to attract and retain the best and the brightest of? cers can be enhanced by incentivizing personnel. In an increasingly onerous and litigious regulatory environment, the funding of License Insurance could be just the ‘ticket.’

By Randy O’Neill

Over seven years ago, the US Depart- fully-paid legal representation when he/she is involved in a ment of Transportation’s Maritime Ad- marine casualty that triggers a Coast Guard investigation. ministration (Marad) released a report The legal representation could range from preparation assis- con? rming what most inland marine tance for casualty scene interviews and helping to complete operators already knew: There are not and submit a Marine Incident Casualty Report (2692) to the enough quali? ed, licensed mariners to Coast Guard, to accompanying the mariner to a related hear- meet the industry’s needs. If anything, ing and possibly months of representation if the Coast Guard the labor pool for quali? ed towboat pi- brings negligence charges leading to a license suspension or re-

O’Neill lots and other key USCG-licensed of- vocation (S & R) proceeding. The mariner receives unlimited ? cers is even shallower than ever. legal representation, regardless of the seriousness of the situ-

Even in the midst of the Great Recession in 2009, almost ation, in exchange for the payment of one annual premium.

two-thirds of the respondents to the Marad study said that

ONFLICTS OF NTEREST they had trouble ? nding quali? ed job applicants, with the C I ?

largest area of concern being the hiring of licensed deck A common misconception among many marine em- of? cers. And troubling as it is to get new applicants, what ployers regardless of size is that it is not in their interests makes the problem even worse is the fact that over half of to provide license insurance to their deck and/or engineer- the survey’s respondents also said that it is becoming increas- ing of? cers. Nothing could be further from the truth, ac- ingly dif? cult to retain quali? ed mariners, with 88% report- cording to longtime maritime attorney William Hewig of ing that retention issues have negatively impacted business Kopelman & Paige.

operations. And there is no quick ? x as 71% of the respon- “Under the legal theory of Respondent Superior,” ac- dents believe the problem would persist for at least ? ve years. cording Hewig, “an employer will be vicariously liable

Sadly, they were too conservative in their prophesy as the for the negligence of an employee unless the employee is manning situation has arguably continued to deteriorate. operating outside the ‘scope of his employment’. For that reason, the employer will want to cooperate closely with,

R I and will most likely share many of the same defenses to

ESPONDING WITH NCENTIVES

Clearly, operators need to come up with incentives not only an incident as will the employee. It therefore makes sense to attract new employees but, as importantly, strategies to re- from the perspectives of both employer and employee to tain their current licensed deck of? cers. An important part of have a maritime attorney, skilled and experienced in the that strategy is to provide high quality employee bene? ts to specialty of Coast Guard administrative law practice, on their of? cers which clearly distinguish their company from its the scene and involved from the outset.” competitors – for business and licensed employees. One cost effective bene? t to consider is marine license insurance. P I

ROTECTING AN NVESTMENT

In fact, many inland marine companies have already taken When it comes to employee retention, marine employers that step and are incorporating pre-paid license defense in- have a ? nancial incentive to assist in the defense of licensed surance into their of? cers’ bene? ts packages in a variety of mariners. A vessel owner or operator has a signi? cant invest- ways. While some companies pay the full annual premium, ment in time, training and treasure in its licensed or docu- others partially subsidize the cost or merely provide their em- mented employees and, because of that, has sound econom- ployees an easy payment method using payroll deduction. ic reasons for assisting in their defense … and retention.

At its basic level, marine license insurance is simply a pre- Additionally, in the vast majority of incidents, issues are paid legal defense policy that, in exchange for an annual resolved quickly and the employer receives the credit – and premium, provides a U.S. Coast Guard licensed of? cer with enhanced loyalty – from its grateful of? cers who did not

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