NU Online News Service
Federally mandated insurance is preventing many contractors from taking part in the oil cleanup in the Gulf of Mexico from the BP oil spill.
To that end, MarketScout says it has developed a program called Oil Spill Cleanup and Remediation (OSCAR) to assist contractors in obtaining the complex policies.
"Most insurers do not provide the required insurance coverage, and many of the ones that do are scared to death of this spill," said Richard Kerr, chief executive officer of MarketScout, an insurance exchange for mostly independent retail agents.
"Right now there are people sitting on the sidelines because they can't get hired due to these insurance requirements," Kerr said.
Contractors are required to buy specific liability, pollution and federally mandated workers' compensation coverage under the Longshore Harbor Workers' Compensation Act (USL&H).
"There are a limited number of carriers willing to look at this exposure right now, especially for new clients, and the approach can be different by carrier," wrote Ian Greenway, president of the of LIG Marine Managers Inc., in a blog.
The act, which has been expanded over time due to case law, provides employee benefits to those in maritime employment on navigable waters or any adjoining area.
Complicating matters, many insurers who write the exposure do so on a state-specific basis. The policies do not apply in neighboring states affected by the spill.
"In this case the mandates are slowing down the process of the cleanup because contractors can't get out there," said Kerr. "We tried to make a one-stop solution for them to get the information they need."
MarketScout says four leading energy insurance companies are participating in OSCAR to provide USL&H, general liability, marine hull liability, workers' compensation, auto, excess liability and property.
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