From the Department of Unintended Consequences

Mandatory Workers’ Compensation insurance in the US was part of the legislative avalanche during the Progressive Era. It started in New York, probably following the Tringle Shirtwaist fire, but other states quickly started following suit.

Well, the Supreme Court didn’t like this much. In a 1917 judgment the court ruled that Workers’ Comp didn’t apply to maritime workers because the seas weren’t technically part of the States’ jurisdictions.

Sound logical enough? Sure, but get a load of this:

The remedy of the New York Workmen’s Compensation Act is inconsistent with the policy of Congress to encourage investment in ships, manifested by the Acts of 1851 and 1884 (Rev.Stats., §§ 4283-4285; c. 121, 23 Stat. 57), which declare a limitation upon the liability of their owners

It’s going to hurt investments in ships! Incredible.

And it gets better.

So a few years later, presumably when progressives got some hand in Washington, the feds went ahead and enacted a federal Workers’ Comp statute that covered waterways, creating the US Longshore and Harbor Workers’ Compensation industry.

And today US L&H Comp premiums are today more than 1.5x normal Workers’ Comp premiums.

The reason? Claims are way more expensive in the federal legal environment.

From the Longshore Blog:

  • The Longshore Act is liberally administered to favor the injured worker;
  • The Longshore Act has not been significantly amended since 1984, and so does not reflect cost control measures adopted in many states, such as provisions relating to medical management and causation;
  • The section 920 presumptions favor the injured worker;
  • The Longshore Act still contains an important provision giving the injured worker his choice of treating physician;
  • There is no lifetime maximum applicable to Longshore Act benefits.

Oops!

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