Federal Coverage Your State WC Policy Will Not Provide
If your employees work on or near navigable waters in South Carolina — harbors, rivers, ports, or offshore — your standard state workers' comp policy may not cover them. Federal maritime law creates a separate coverage obligation that many SC employers discover only after a claim is denied. This video explains exactly when maritime coverage applies and how to make sure you are not leaving employees and your business exposed.
The Longshore and Harbor Workers' Compensation Act (USL&H) is a federal law that provides workers' comp benefits to maritime employees who are injured on navigable waters or adjoining areas — docks, piers, wharves, terminals, and areas used for loading, unloading, building, or repairing vessels. The Act is administered by the U.S. Department of Labor and provides benefits that are often more generous than state systems, including medical treatment, disability payments, and death benefits. Critically, the Act applies regardless of whether the employer has a state workers' comp policy. State policies do not satisfy the federal obligation, and an employer without proper USL&H coverage faces federal penalties and direct liability for covered injuries.
South Carolina has significant maritime activity across its ports, rivers, and coastline. Employers who may have USL&H exposure include: contractors who work at the Port of Charleston, Georgetown, or Beaufort; marine construction and dredging companies; boat repair and shipyard operations; businesses that load or unload vessels; waterfront construction contractors whose employees work on or adjacent to navigable water; and longshore and stevedoring operations. The geographic test is whether employees regularly work on, over, or immediately adjacent to navigable water. Even a construction subcontractor whose workers occasionally work on a dock may have USL&H exposure for those specific employees. Many SC employers in the construction trades do not realize this coverage gap exists.
USL&H coverage is typically added as an endorsement to a standard workers' comp policy, or purchased as a separate standalone policy for operations with significant maritime exposure. The endorsement notation on a standard policy is Coverage Part B — Voluntary Compensation, which extends coverage to maritime employees who are otherwise excluded from state WC. Rates for USL&H are higher than standard workers' comp rates for the same operations, reflecting the more generous benefit structure under federal law. Employers with maritime exposure should work with a specialist who understands both the federal trigger conditions and the SC-specific underwriting market, as not all carriers write USL&H endorsements and separate markets often provide better terms.
No. The Act applies to employees whose work is on navigable waters or in adjoining areas used for maritime commerce — docks, piers, wharves, terminals, and similar facilities. Workers who merely work near water without maritime connection (a nearby office building, for example) are not covered under USL&H. The key question is whether the work itself has a maritime nexus.
USL&H rates are generally higher than standard workers' comp rates for the same occupations because the federal benefit structure provides more generous compensation. The specific rate depends on the type of work, the maritime exposure, and the carrier. Employers with occasional maritime exposure may pay a modest endorsement premium, while full-time maritime operations face significantly higher costs.
The employee can file a claim under federal law regardless of your coverage. Without USL&H coverage, you are personally liable for all benefits owed under the Act, which are often higher than state WC benefits. The U.S. Department of Labor can also impose civil penalties for operating without required coverage. This is a coverage gap that is typically discovered at the worst possible time — after a serious injury.
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