13.4 Other States, USL&H, and Federal Acts

Three states matter on the Information Page

The Information Page (Item 3) controls which states are insured:

• Item 3.A — Workers Compensation Insurance lists states where coverage applies under Part One at inception. These are the states where the insured had known operations.
• Item 3.C — Other States Insurance lists states for Part Three coverage.

Monopolistic state funds (see below) can NEVER be listed in 3.A or 3.C.

Part Three — Other States Insurance

Part Three responds when an employer begins work in a state not listed in 3.A during the policy term — for example a contractor expands across a state line. If that new state is listed (or covered by a blanket entry) in Item 3.C, Part Three provides coverage as though the state had been listed in 3.A from the start. Trap: Part Three does NOT cover states where the insured had operations on the effective date but failed to list them, and it never covers monopolistic-fund states.

Monopolistic state funds

A few states require employers to buy workers compensation only from the state-run fund; private insurers cannot write Part One there. These monopolistic states are commonly taught as North Dakota, Ohio, Washington, and Wyoming (Puerto Rico and the U.S. Virgin Islands also operate monopolistic systems). Because the standard policy cannot cover them, employers there buy from the state fund and may add a stop gap endorsement for employers liability (Part Two-type) coverage, which the state fund does not provide.

USL&H — maritime workers on shore

The U.S. Longshore and Harbor Workers Compensation Act (USL&H) is a federal law covering maritime workers injured on navigable waters or adjoining areas (piers, docks, terminals) who are NOT crew of a vessel. State acts do not cover them. USL&H exposure is added to the policy by the Longshore and Harbor Workers Compensation Act Coverage Endorsement (WC 00 01 06), and benefits/rates are higher than ordinary state coverage.

Other federal acts

Trap: the Jones Act and FELA are fault-based liability laws (the worker must prove negligence), unlike no-fault state workers comp. Crew = Jones Act; shore-side maritime = USL&H.

Distinguishing seamen from longshore workers

The single most-tested maritime distinction: a crew member of a vessel (a seaman) is covered by the Jones Act; a worker loading/unloading on the pier or dock who is not crew is covered by USL&H. State workers comp covers neither once the maritime nexus exists.

Worked "New State" Scenario

A landscaping company is listed in Item 3.A for Colorado only, with all states except monopolistic and listed entered in Item 3.C. Midway through the term it takes a job in Utah (a private-market state where it had no prior operations). Because Utah is reached by the 3.C blanket entry and the operations began after the effective date, Part Three extends coverage as if Utah had been in 3.A from inception.

Now change the facts: the company actually had a crew working in Wyoming (monopolistic) the whole time. Wyoming can never sit in 3.A or 3.C, so the standard policy provides no Part One there — the employer must buy from the Wyoming state fund and add stop-gap employers-liability coverage elsewhere. This pair of outcomes — blanket 3.C picks up new private-market states, monopolistic states are excluded — is the heart of the topic.

Fault-Based Federal Acts vs. No-Fault WC

The exam's sharpest contrast: ordinary state WC and USL&H are no-fault (benefits regardless of blame), while the Jones Act (seamen) and FELA (railroad workers) are fault-based tort statutes — the injured worker must prove employer negligence to recover, but can then win full tort damages. So a vessel crew member injured by employer negligence sues under the Jones Act; a longshoreman on the dock collects no-fault USL&H benefits.

Coverage-Setup Cheat Sheet

Crew = Jones Act; shore-side maritime = USL&H is the single most-tested line.

The "Failed to List" Trap

Part Three (Other States) does not rescue an employer who already had operations in a state on the effective date but failed to list it in Item 3.A — Part Three covers only states where work begins after inception. The remedy for known operations is to list the state in 3.A from the start. Distinguishing "new state entered mid-term" (Part Three responds) from "existing unlisted operations" (no coverage) is the decisive Part Three question.

Stop-Gap Connection to Monopolistic States

Because monopolistic-fund states can never appear in 3.A or 3.C, an employer there must buy Part One from the state fund and add stop-gap employers liability elsewhere (often on the CGL) for the Part Two-type suits the fund won't cover. The exam links monopolistic states → state fund + stop gap as the complete coverage solution.