Consider the Hathaway Winch case, says Duncan 

 Amos, an area fisheries specialist with Sea Grant's 

 Southeast Marine Advisory Service. A fisherman 

 seriously iryured by the winch aboard his boat sued 

 the winch maker and received $1.7 million. The 

 defendant, Hathaway Winch, had built the winch 

 in 1938. 



"The Hathaway Winch case is symptomatic of the 

 whole problem," says Jim Cooper, a Morehead City 

 insurance agent. 



"That's like saying a 1937 automobile doesn't 

 have seat belts, and we're going to make a claim. 

 That winch was built when the standards weren't 

 the same as they are today," Cooper says. 



Insurance agents say such exorbitant awards are 

 pushing rates up. And as it becomes less profitable to 

 write marine insurance, more companies pull out. 



The U.S. Coast Guard estimates that the fatality 

 rate of fishermen is seven times that of the average 

 industrial worker. In 1983, 111 fishermen died in 

 accidents and 242 fishing vessels were lost. 



As fewer and fewer companies are left to insure 

 fishermen, the decline in competition leads to even 

 higher rates. 



Insurance agents blame the trial law^yers who seek 

 such big awards for their clients. And they point to 

 the unpredictability of the courts. 



An award for a fractured arm, for example, may be 

 as low as $5,000 or as high as $500,000. 



"A case may be worth $10,000, so we give them 

 $20,000 because we're afraid a jury will award them 

 $50,000," says Cooper. 



But attorneys say they're only serving the people 

 who have been injured. 



Fishermen are caught in the middle. 



They may not be able to afford to pay the high cost 

 of their insurance. But, then again, they can't afford 

 not to pay it. 



Fishermen who operate without liability insurance 

 risk losing everything, says Amos. An injured 

 employee could sue and ' 'go after everything— the 

 boat, house, cars, everything," says Amos. 



But folks in North Carohna aren't as likely to sue, 

 says Cooper. 



He adds, ' 'North Carolinians are more stable in 

 their employment. Most of the fishermen here have 

 grown up in the fishing business and have a good 

 safety record. There's not a tremendous influx of 

 people from other states going into the business. And 

 the court system here may be more conservative.' ' 



Cooper carefully screens applicants before deciding 

 whether or not to insure them. "If they're not expe- 

 rienced, we don't write it (a policy) at any price," 

 he says. 



A bill considered in the last session of Congress 

 would have set up a system similar to workmen's 

 compensation for disabled fishermen. The bill also 

 placed a cap of $500,000 on Uability claims. But leg- 

 islators rejected the bill. Opposition to the bill came 

 mainly from trial lawyers and consumer groups. 



That bill is being rewritten to exclude the 

 $500,000 limit. If passed, it will only mean that 

 fishermen are required to carry additional safety 

 equipment on board. 



Fishermen also are looking for ways to ease the 

 strain. 



There's little they can do about the ups and downs 

 of the insurance business, but they can band 

 together to help reduce their premiums. 



Over 30 years ago, a group of Norwegian fishermen 

 on the West Coast set up a mutual insurance associa- 

 tion. As a group, they invested their premiums. 



Since no claim was filed against them, they 

 applied the profit from their investments toward the 

 next year's premiums. Eventually, the fishermen's 

 insurance costs were lowered. 



' 'As a club, you can control the membership. You 

 can screen to make sure they (fishermen) operate 

 safe vessels and have good crews," Amos says. 



But he warns that such a system can't be applied 

 with immediate results. It takes years to build up 

 enough money so that rates can be reduced. 



Self-insured groups also risk not having enough 

 money to cover a claim. "If the money isn't suffi- 

 cient to cover a claim, you have to come up with 

 that money,' ' says Amos. Those are risks that in- 

 surance companies usually take. 



So far it seems the insurance crisis in the fishing 

 industry is peculiar to the United States. The United 

 Kingdom, Canada and Australia, for example, aren't 

 experiencing the crunch. "It's not so prevalent there 

 for people to sue and seek large settlements,' ' says 

 Amos. 



In addition, licensing of fishermen is mandatory in 

 many European countries. Fishermen periodically 

 attend nautical colleges where they receive training. 

 There is no comparable school in the United States 

 industry. 



For now, no one is satisfied with the way things 

 are, says Cooper. ' 'But it will literally take an act of 

 Congress to change things,' ' he says. 



"The only answer is to put some type of predicta- 

 bility into it. There's got to be some moderation 

 because all these large awards end up being paid by 

 the public. Insurance is just a means of spreading 

 the loss of a few among the many,' ' says Cooper. 



And fishermen are having to pay the price. 



