13.4 Other States, USL&H, and Federal Acts

The Information Page Controls Geography

The Information Page (declarations) of the NCCI policy uses numbered items. Two are heavily tested:

• Item 3.A — Workers Compensation Insurance: lists the states where the policy provides primary statutory coverage at inception. Operations in these states are fully covered.
• Item 3.C — Other States Insurance: names additional states where the insured may begin operations during the term. If the insured starts work in an Item 3.C state, coverage applies automatically.

Other States Coverage

Because an employer may expand into a new state mid-term, Other States Insurance prevents a gap. Producers often list every state except the home state and any monopolistic states in 3.C.

Exam trap: a state already shown in 3.A cannot also be in 3.C, and a monopolistic fund state can never be listed in 3.A, because the standard insurer cannot write primary comp there.

Monopolistic State Funds and Stop Gap

A handful of states are monopolistic state fund states, where employers must buy workers compensation only from the state-run fund — a private NCCI insurer cannot provide Part One there. Historically these include Ohio, North Dakota, Washington, and Wyoming.

The state fund provides the statutory benefits (Part One) but typically does NOT provide employers liability (Part Two). That leaves the employer exposed to third-party-over and dual-capacity suits.

Stop Gap Coverage

The fix is Stop Gap (Employers Liability) coverage, added by endorsement to the employer's general liability or workers comp policy. Stop Gap restores the Part Two protection the monopolistic fund omits.

Exam trap: in a monopolistic state, do not answer 'add the state to Item 3.A.' The correct move is state fund for benefits plus Stop Gap for employers liability.

Federal Workers Comp Acts

Several federal acts cover workers not protected by state comp laws. Distinguishing them is a reliable exam item.

• U.S. Longshore and Harbor Workers Compensation Act (USL&H): covers maritime workers — longshoremen, ship repairers, harbor workers — injured on navigable waters or adjoining piers, docks, and terminals. Coverage is added by the USL&H endorsement to the standard policy.
• Jones Act (Merchant Marine Act): covers seamen — the crew of a vessel in navigation. It is not no-fault; an injured seaman must prove employer negligence, but recovers full tort damages.
• Federal Employers Liability Act (FELA): covers interstate railroad workers; like the Jones Act, it is fault-based, not no-fault.
• Defense Base Act (DBA): extends USL&H to civilian contractors working on overseas military bases.
• Federal Employees Compensation Act (FECA): covers civilian U.S. government employees.
• Federal Black Lung Benefits Act: covers coal miners with pneumoconiosis.

Jones Act vs. USL&H

The two are mutually exclusive: USL&H covers shore-based maritime workers, while the Jones Act covers vessel crew (seamen). A worker is one or the other, never both, and the dividing line is whether the person is a member of a vessel's crew.

Reading the Information Page on the Exam

Many other-states questions are really declarations-reading questions. When a fact pattern says an insured 'began operations in a new state,' check whether that state was listed in Item 3.C. If it was, coverage attaches automatically and the producer simply notifies the carrier.

If the new state was not in 3.C and is not monopolistic, there is a coverage gap until the policy is endorsed to add it. If the new state is monopolistic, neither 3.A nor 3.C helps — the employer must approach the state fund and add Stop Gap for employers liability.

Exam trap: USL&H and the Defense Base Act are added by endorsement; they are never automatic under Other States Insurance, because federal maritime and overseas-base exposures are outside the standard state-comp grant.

Connecticut and the federal/state overlap

Connecticut, with its long coastline and active ports, generates real USL&H exposure for marine contractors, shipyards, and dock operators. A worker injured on the navigable waters or the adjoining pier/dock falls under federal USL&H, while a worker doing the same employer's purely land-based work falls under Connecticut state comp. Many maritime employers therefore carry both, with the USL&H endorsement added to the standard policy. The producer must identify the situs and the worker's status, because choosing the wrong system leaves a gap that neither the state act nor the unendorsed policy fills.

Quick comparison of the federal acts

The fault distinction is the single most-tested point: USL&H, DBA, FECA, and Black Lung are no-fault, while the Jones Act and FELA require proving employer negligence but allow full tort damages. Memorizing which acts are no-fault versus negligence-based reliably answers several questions.

Exam Tip: Item 3.A lists primary states; Item 3.C provides automatic Other States coverage; monopolistic states need the state fund plus Stop Gap for employers liability; and federal maritime/overseas coverage is added by endorsement, never automatically.