‘Does U.S. want a fishing industry?’

Gloucester Daily Times
Thursday, August 14, 1986

By Bill Kirk

The defeat of the marine insurance bill in the House of Representatives has sent tremors through the local fishing industry.

“This is very devastating for The entire U.S. fishing industry,” said Sam Parisi, a local businessman who has been trying to get insurance for Gloucester fishing boats for almost two years.

“Does the United States want a fishing industry or not?” Parisi asked. But not everyone is so sure the proposed bill would have helped the industry by reducing insurance premiums. Nowhere in the bill did the insurance companies promise to reduce insurance premiums, local attorney Joseph Orlando pointed out. The bill capped the amount fishermen could collect in personal injury suits, on the assumption that the cap would cut insurance companies’ costs, and the companies could then afford to lower rates. Orlando, and attorney with Orlando and White, a local law firm which has won many personal injury suits resulting in high claims, said the bill as authored by Rep. Gerry Studds was written by and for the insurance companies.

“All it does is to assure greater insurance company profits,” Orlando said. “They get this bill and people who are injured can’t bring action against vessels. A guy could shatter his leg, be out 10 months, and he has no recovery. “The bill makes the victims pay for the negligence of boatowners.”

Under the bill, a fisherman with a temporary disability would have received 80 percent of his wages or $30 a day, whichever was greater, plus all medical expenses, and would not have had to sue to get it. A permanently disabled fishing boat crew member would have had to go to court, but would have been limited to $500,000, plus medical expenses. If the boat owner was guilty of gross negligence or willful misconduct, however, there would be no limit.

“I am not surprised Studds is pushing it.” Orlando said. “He has people on his staff who own fishing boats and who are closely aligned with the insurance companies.

“No one has ever said that if this bill passes that they (insurance companies) will lower premiums.” Parisi disagreed.

To blame high insurance premiums on insurance companies is “totally ridiculous. Insurance companies are a business, and they are going to make money. To make money, they will raise insurance premiums.”

“The way (Joe) Orlando looks at it, if there is a ceiling on (premiums) he would be working for less. Naturally it is in their (attorneys’) best interests to defeat this.”

Parisi said the bill would have had several benefits for the fishing industry: Insurance companies, now hesitant to insure fishing boats because of exorbitantly high personal injury claims, would be more willing to grant personal injury insurance to boat owners;

Boat owners, who are faced with high personal injury suits and who may be considering dropping out of the industry, would stay in the in the industry And hire more crewmen. Parisi said, “What happens if a boat owner says, ‘It’s not worth it to own a boat-I incur all the costs and if I get sued, I must pay.'”

Instead, Parisi said, boat owners are saying, “‘I will work for another boat. If I slip, then I will sue.'”

He added, “They are making it impossible for a boat owner to want to own a boat. They can’t even make (premium) payments, much less a profit.”

Brian Tarr, president of the Gloucester Fisherman’s Loan Fund, who like Parisi is also trying to organize an insurance cooperative made up of Gloucester boat owners, said one boat owner he knows is paying $72,000 for insurance, with minimal coverage and $5,000 deductible.

He said the bill was “one avenue open to us. (Its defeat) closes the door on us. Many of us were counting on that bill to relieve the pressure of trying to get insurance in the industry.

“This was a hope,” he said.

“It had some bugs that had to be worked out, but it was a start, a beginning.”

The Seafares International Union, which represents a small percentage of the crewmen in Gloucester, supported implementing the bill for one year to see if it would result in lower premiums. Michael Orlando, vice president of the union’s Gloucester branch, could not be reached for comment. Joe Piva, president of the union in New Bedford, said the bill got defeated because “the insurance companies gave no indication that premiums would come down.”

“Congressmen were scared that if they passed it, the insurance rates would go up or stay the same,” he said. We were not totally for it. We wanted to put a one-year umbrella on it.” In both Gloucester and New Bedford, many vessels, which have already paid off their mortgages are going without insurance. Parisi said boat owners without insurance incorporate their vessels so that if they sued on a personal injury claim, they can tell the insurance company to take the corporation, while protecting the rest of their assets. But Parisi said, that is a dangerous practice.

“Some sharp lawyer will come along and pierce the corporation and take the guy’s house and car and everything else he owns.”