A couple months ago, captains assembled at our monthly From the Bridge luncheon talked about dayworkers. In the room, they exchanged tips and what appeared to be tricks on how to get dayworkers onboard when the yacht is in a shipyard, ways they suspect would cover them legally and with their insurance company if anything went wrong.
We purposefully left that bit out of the story about that lunch conversation in an effort to avoid the appearance of suggesting or endorsing some practices. That sparked several readers to want to know why. It was precisely that information they sought.
So we asked an insurance broker and a lawyer to explain the liabilities and legalities of hiring dayworkers on yachts, and the answers were, understandably, vague.
“Everything’s fine until something bad happens,” said attorney Michael Karcher with Karcher, Canning and Karcher in Ft. Lauderdale. “If they get hurt, they are going to fall into someone’s pocket.”
Signing a dayworker on as crew doesn’t make it so. It may get them past the tough guy at the shipyard gate, but it doesn’t give them all the protections that a real crew member gets.
“You can call them whatever you want, but at the time of an incident, we’ve got to see how he fits in,” said Nancy Poppe, an insurance broker with Willis. “If the owner has a legal liability, his insurance is there to respond to that. How the injured party is treated depends.”
In the United States, a worker on a boat in a shipyard is either covered by the yacht’s P&I insurance for crew, worker’s comp insurance for workers or harborworker insurance for those who work in shipyards.
“When something happens, the insurance company will ask what is he and whose is he,” Karcher said.
It matters because those in the “crew” category are entitled to benefits. They not only have their medical issues taken care of, but they can get living expenses paid for the duration. If they can prove negligence, they can then sue for more damages. For those Jones Act benefits to kick in, they have to have some attachment to the vessel.
Those in the “worker” category, those covered under state worker’s compensation insurance, can’t sue for anything more than from their own employers. They get some portion of their salary and their medical expenses, but that’s it.
“Should that person get hurt, he may want to be considered a crew member, but the owner doesn’t want him to be considered a crew member,” Karcher said.
When hiring dayworkers, the first thing that yacht captains must know — and I suspect they do — is that not all dayworkers are created equal. There appear to be three types of dayworkers when it comes to insurance coverage and the law. (And remember, only if there’s an incident or accident does any of this actually come into play.)
First are legitimate crew. Even if they aren’t the full-time crew on the yacht in question, if they are yacht crew most days and they come onboard to help a captain get through a shipyard period or prepare the yacht for a trip, then both the law and the insurance provider will most likely see them as crew.
That’s important because if something goes wrong, the yacht’s P&I insurance offers a lot of coverage and benefits for crew, which is good news for an injured crew member, not so great for an owner.
In other words, those pockets are deep, so a problem means the yacht’s insurance is most likely on the hook.
The second type are the workers who belong to legitimate businesses but who don’t have all the proper and expensive insurance to get them in the front gate. Although the captain calls them crew to get them in the shipyard, they still work with their own company shirts on, there’s an invoice exchanged at the end of it all, and the guy goes home at the end of the day.
The third type of dayworker is the one that falls into neither category. These can be unlicensed and uninsured freelance workers, the ones who help with specialized projects like varnishing or detailing, perhaps they fix the knicks in the wood floor or clean the leather.
“Regular companies and crew have a clear line to coverage,” Poppe said. “It’s the trades guy without insurance that we need to worry about. The ones that are paid in cash, the ones the yard won’t let in.”
“They’re calling them crew to save a little money, and that opens their employer up to bigger problems,” Karcher said.
The sticky part
Among these dayworkers in the third category (those that are neither crew nor business employee), the pool is split even further between the freelance varnisher that the captain hires every year and the warm body hired off the dock to help clean the bilges.
In the first case, the person is known to the captain to do a good job year after year. He’s reliable and careful and trustworthy. And although it’s working the system to sign him on as crew, it’s accepted practice.
“It’s a calculated risk,” Poppe said. “I like hiring companies because I know they’re going to have their own insurance. But I know that doesn’t always happen.
“Is it wise? In terms of the owner’s liability, no, but they have to get business done,” she said. “If you, captain, have decided this is the guy you trust, your insurance won’t say do or don’t do it. Insurance will respond to the owner’s liability, period.
“But, if something happens, he’s not going to be treated like a crew member,” she said. “The owner is covered, but now he has a claim, and that may create more problems for the captain.”
The other type — the kind that makes both Poppe and Karcher cringe — is the warm body a captain pulls off the dock because he needs something done right now.
“The captain needs a job done and done cheaply from the guy on the dock,” Poppe said. “But that guy has no skin in the game. Is this the right way to get things done? I wouldn’t do it. It comes down to risk management.”
A final word: These are the opinions and analyses of one insurance broker and one lawyer. Others are out there and could influence how a yacht captain or department head makes temporary hiring decisions.
“There is no exclusion for dayworkers,” Poppe said. “The owner’s liability is a very broad obligation on the insurance company’s part. It will respond to an issue.
“Dayworkers are a part of our industry,” she said. “Being smart about it is the way to do it.”
Lucy Chabot Reed is editor of The Triton. Comments on this story are welcome at firstname.lastname@example.org.