On a dead-still day, a crewman slipped on the deck of a scallop boat while fishing off the Virginia coast. Even though the resulting back injury was minor and he was declared fit for duty within a week, the crewman settled his claim with the boat owner's insurance company for $70,000.

Another insurance claim recently filed by an operator of a Virginia fishing vessel was for the total loss of a half-million-dollar, relatively new 90-foot boat, burned in an electrical fire while sailing in New England waters. The Coast Guard report on the incident concluded that the wiring on the sunken boat was substandard. No one on the vessel was hurt.

A surge of back and arm injuries among crewmen and sinkings of commercial fishing vessels on the Atlantic and Pacific coasts have provoked insurance underwriters to declare insuring the nation's fishing fleet a high-risk proposition. As a result, some Virginia boat captains are turning to Lloyd's of London, one of the few firms that will still insure their vessels.

Just seven months ago, there were 10 to 15 domestic underwriters providing marine insurance, said Robert W. O'Sullivan, an insurance agent with the Flagship Group Ltd., a Norfolk-based insurance company. But as the number of claims has mounted, one company after another has quit issuing marine insurance, leaving less than four U.S. companies to cover the nation's maritime fleet, he said. Insurance premiums have been driven sky high.

O'Sullivan said that underwriters remaining in the marine insurance market are now charging more than 5 percent of the vessel's value for hull insurance and as high as $3,000 per crewman for a protection and indemnity (P&I) policy, up from 1.4 percent for hull and $8 per man for P&I.

"The rates are going up because of the number of losses. Pure and simple," he said.

One reason for the high number of insurance claims, O'Sullivan said, is the "gold rush syndrome" in the fishing industry. In an effort to build up the domestic fleet in the late 1970s, following enactment of legislation that extended U.S. fishing sovereignty out to 200 miles, the federal government provided tax incentives to entice corporations to buy boats. Now, however, fishing ports nationwide are becoming choked with vessels, and the get-rich-quick opportunity for investors has fallen flat.

The situation is most pronounced in Gloucester, Mass., where there have been at least 36 boat sinkings since 1980, representing a loss of about $11 million, according to Jeff Pike, regional representative for Rep. Gerry E. Studds (D-Mass.), a member of the House Merchant Marine and Fisheries Committee. Since July, according to an FBI spokesman in Boston, the agency has been "actively conducting a case on at least two" boats, looking into allegations that they might have been sunk intentionally to defraud insurance companies.

Even though the boat sinkings represent only a fraction of the nation's fishing fleet, longtime boat captains who own and operate their vessels on a tight financial margin are being hurt by rising insurance costs.

The tightening of the marine insurance market has put boat captains in Virginia and Maryland in a dangerous stranglehold. Many no longer can afford to insure their vessels, but few would venture into ocean waters without coverage.

Williams Wells Sr., owner of Seaford Scallop Co. near Hampton, Va., received word last month that St. Paul Fire and Marine Insurance Co., based in New York City, had canceled the protection and indemnity policies on his company's 11-boat fleet. Lloyd's of London has agreed to underwrite the policies, he said, but at an increase of $3,700 for each vessel.

Wells said that four boats will remain tied to the dock this winter and their crews laid off because the company can't afford the higher insurance rates. Breaking the news was "hard to do before Christmas, to tell crews that have been working for us that they're out of jobs," he said.

"It's a tragedy in the industry," said I. Luie Fass, president of Fass Brothers Fish Co. in Hampton, Va., which owns a number of fishing vessels and recently sold its Fass Brothers chain of seafood restaurants. Fass compared the problem of skyrocketing insurance rates to rising fuel oil costs that crippled fishermen in the 1970s.

The insurance problem has "almost driven me crazy," said Vaughn Hogans, vice president of Hogan's Insurance Agency in Rock Hall, Md. He said that insurance rates on smaller Chesapeake Bay boats have risen 15 percent in the last few months, compared with 100 percent on the ocean-going vessels.

One method of reducing high premiums has been to insure the boat below its full value. Larry Simns, president of the Maryland Watermen's Association and captain of a 46-foot patent tonger bay boat, said it cost him $36,000 to repair his boat after it hit ice and sank last January. The vessel was insured for only $20,000.

"The problem is getting worse by the minute," said Wells' son, William Wells III. He said the boat sinkings in Gloucester are an isolated situation. "It's not our problem. The real problem in the industry is P&I," he said.

David Owen, regional marine manager for St. Paul Fire and Marine Insurance, the company that canceled Wells Scallop's P&I coverage, said his firm has suffered a 125 percent loss on fishing vessel accounts, partly because of the large number of accident claims. Owen blamed the problem partly on "sloppiness in hiring practices," with some captains and owners taking on inexperienced crew members for what often is a dangerous job on high seas.

Wells and O'Sullivan said the root of the insurance-cost problem is the Jones Act, a federal statute passed in the 1920s that allows seamen to sue vessel owners when an accident occurs aboard ship.

Whether the boat owner was negligent is no longer a factor, said William Wells III. He suggested that a version of seagoing workmen's compensation might provide a solution to escalating insurance costs. If something isn't done soon, "we'll go out of business," he said.

The just-convened 99th Congress will discuss possible legislative solutions to the boat insurance problem, with remedies ranging from emergency action to revisions in maritime law. Studds' aide, Pike, said some type of emergency funds appropriation might be required for what is rapidly becoming a crisis in the American fishing industry. Pike said there will be significant insurance premium increases this spring, the effects of which will be felt by vessel owners much sooner than legislation could prescribe a solution.

The House fisheries and wildlife conservation subcommittee, chaired by Rep. John R. Breaux (D-La.) is holding a series of regional hearings on the insurance problem to give fishermen and others a chance to talk. The first was held Oct. 16 in Boston. Others are scheduled for April or May in Seattle, and in New Orleans, San Diego or San Francisco, followed by a wrapup hearing in Washington.

The Merchant Marine Committee expects to deliver a bill to the floor shortly that would revise and consolidate maritime law. A committee staff member said the proposed legislation most likely will limit the liability on vessels, reducing the amount for which an injured crewman could sue the owner.