C4.2.2.b. What does the financial security to provide compensation for death and long-term disability cover?

Standard A4.2.1, paragraph 8, incorporated through the 2014 amendments to the Code of the MLC, 2006, details the minimum requirements that must be met by the system of financial security to assure compensation for contractual claims. The term “contractual claim” means any claim which relates to death or long-term disability of seafarers due to an occupational injury, illness or hazard as set out in national law, the seafarers’ employment agreement or collective agreement.

The minimum requirements to respect are:

(a) the contractual compensation, where set out in the seafarer’s employment agreement shall be paid in full and without delay;

(b) there shall be no pressure to accept a payment less than the contractual amount;

(c) where the nature of the long-term disability of a seafarer makes it difficult to assess the full compensation to which the seafarer may be entitled, an interim payment or payments shall be made to the seafarer so as to avoid undue hardship;

(d) the seafarer shall receive payment without prejudice to other legal rights, but such payment may be offset by the shipowner against any damages resulting from any other claim made by the seafarer against the shipowner and arising from the same incident; and

(e) the claim for contractual compensation may be brought directly by the seafarer concerned, or their next of kin, or a representative of the seafarer or designated beneficiary.

Shipowners’ liability