Citing a decline in the actual payouts for workers injured on the waterfront, the National Council on Compensation Insurance (NNCI), which works with all the major insurance companies selling workers’ compensation insurance, has asked for reductions in the premiums charged for employees covered by the Longshore and Harbor Workers Compensation Act. It’s a significant change in a trend that has been pretty steady for years.

According to industry insiders, injuries to workers covered by the LHWCA have typically accounted for about nine out of every ten workers’ compensation claims for companies with shipyard operations. But the amounts paid out for LHWCA covered workers have gone down approximately five percent over the last couple years. As a result, the NNCI has recommended a 1.2% reduction in premiums for workers covered by the LHWCA.

The proposed reductions come at a time when many other occupations are seeing significant increases in premiums. According to one study, in Virginia, non-LHWCA employers there can expect anywhere from a 2.3 to a 3.4 percent increase in workers’ compensation insurance premiums.

One of the principal reasons costs have gone down for LHWCA workers, according to sources—the focus on safety in the shipyard industry. Experts say that the primary factor in determining workers’ compensation insurance rates is not wages, but medical expenses. For non-LHWCA occupations, medical expenses have continually escalated over the last 10 years, and now account for about 65% of the cost. With LHWCA workers, medical costs account for only 44% of the payouts on policies.

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