I paid my college neighbor $200 to help me wash and wax the yacht, and maybe handle lines during a cruise. He slipped on soapy water and broke his back. He sued me. I sent it to my insurance. They said, “He was a paid employee. We exclude liabilities to employees. And by the way, he’s suing under the Jones Act.”
Key Takeaways
- The Jones Act is a Monster: Federal maritime law grants specific rights to “Seamen” (crew). If you pay someone to work on your boat, they might be classified as a Jones Act Seamen.
- Standard Liability Excludes Employees: Your standard “Guest Medical” or P&I (Protection and Indemnity) Liability covers guests. It specifically excludes anyone you pay.
- Workers Comp Doesn’t Apply: Standard land-based Workers Comp usually doesn’t apply to crew on navigable waters.
- You Need “Crew Coverage”: You must add a “Paid Crew” endorsement or buy a specialized yacht policy (like Markel Jackline) that includes Jones Act coverage.
The “Why” (The Trap)
The trap is “Casual Labor.”
You think he’s just a buddy helping out for cash. The law sees him as an employee working in a hazardous maritime environment. If he gets hurt, he is entitled to “Maintenance and Cure” (living expenses and medical bills for life until healed). This can be millions.
The Investigation (I Asked Brokers)
- Scenario: Occasional paid hand.
- Progressive: “We do not cover paid crew. Period.”
- Markel: “We can add a ‘Occasional Crew’ endorsement.”
- Chubb: “Our yacht policy includes incidental crew coverage automatically.”
Comparison Table
| Person Injured | Coverage Source | Potential Liability |
| Guest (Unpaid) | P&I Liability / Guest Medical | Medium |
| Contractor (Pro) | Their Own Workers Comp | Low (if insured) |
| Paid Hand (Under table) | UNINSURED (Jones Act) | Extreme (Millions) |
Step-by-Step Action Plan
- Don’t Pay Cash: If you hire a pro, hire a company with insurance. Ask for their COI (Certificate of Insurance) showing Workers Comp and Longshoreman’s coverage.
- Check “Paid Crew” Endorsement: If you employ a captain or deckhand, even part-time, verify your policy covers “Jones Act” or “Crew Liability.”
- Use a Release (Maybe): Waivers are weak against Jones Act claims, but better than nothing.
- [IMAGE: Screenshot of a Certificate of Insurance showing ‘USL&H’ coverage]
- Upgrade to a Yacht Policy: If your boat is >$300k, move from a “Boat” policy to a “Yacht” policy (like AIG/Chubb) which handles this better.
FAQ
What if I pay him in beer?
Usually fine. “Consideration” (money) is the trigger for employment.
Does this apply to my kids?
No, family is usually covered under standard liability (or excluded from suing you depending on the state).