By Tom Andrews, CPA
Worker’s Compensation is a form of state insurance that provides benefits to employees injured in the course of employment. Two of the more frequently asked questions we receive at AvMar is:
- Are US Flagged Vessel required to obtain workers compensation insurance?
- Are Foreign Flagged Vessels required to obtain workers compensation insurance?
In our experience the answer to both of these questions is NO. US Flagged Vessels and US Flagged Luxury Yachts are covered under the “Jones Act”. The Jones Act is a federal statute that regulates maritime commerce in U.S. Waters and between U.S. Ports. The Jones Act allows injured seaman to make claims for injuries in the course of employment.
Foreign Flagged Vessel and Foreign Flagged Luxury Yachts are covered under the terms of their Flag State in many cases these flags have similar provisions that are included under the Jones Act for injured crewmembers.
At AvMar Payroll Services we process payroll for both US Flagged Vessels and Foreign Flagged Vessels, all vessels that we provide services for carry a general liability insurance policy, it is our understanding that when a crewmember is injured on a vessel a claim is typically filed and settled with that policy.
Please be advised that as a yacht payroll processor we recommend clients consult with the maritime attorney to determine the necessary insurance coverage’s needed for their vessel.