13.4 Other States, USL&H, and Federal Acts
Key Takeaways
- Item 3.A lists primary states where Part One applies at inception; Item 3.C 'Other States Insurance' extends coverage to states a worker may enter LATER (except monopolistic states)
- Other States Coverage can NEVER reach the monopolistic states (OH, ND, WA, WY) - those require a separate state-fund policy plus stop gap employers liability on the CGL
- USL&H covers longshore, harbor, and ship-repair workers on navigable U.S. waters; it is added to the WC policy by the Longshore endorsement (WC 00 01 06) and is no-fault
- The Jones Act (seamen/crew) and the USL&H Act (longshore) are MUTUALLY EXCLUSIVE - a worker fits one or the other, never both
- FELA (interstate railroads) and the Jones Act (seamen) are negligence-based and allow pain-and-suffering recovery; FECA (federal civilian employees) and USL&H are no-fault benefit schedules
Where the Policy Applies: Item 3.A vs. 3.C
The Information Page controls geography through numbered items:
| Item | Contents |
|---|---|
| Item 1 | Named insured, address, legal status |
| Item 2 | Policy period (effective and expiration dates) |
| Item 3.A | States where the employer operates at inception - Part One applies fully |
| Item 3.B | The Part Two employers liability limits ($100K/$500K/$100K standard) |
| Item 3.C | Other States Insurance - states the employer may enter later |
| Item 3.D | Endorsements and explanatory schedule items |
| Item 4 | Premium basis: classifications, rates, and estimated payroll |
Other States Coverage (Item 3.C) matters when an employee travels or temporarily works outside the home state. If 3.C lists 'all states except those in 3.A and the monopolistic states,' coverage springs up automatically the moment operations begin in a new state, paying benefits under that state's law. A state in neither 3.A nor 3.C where the employer already operated at inception is uninsured.
Exam Key: A state must appear in 3.A or 3.C for the policy to respond. Item 3.C closes the timing gap for future expansion - the moment work starts in a 3.C state, full statutory coverage applies.
The Monopolistic Limitation
Other States Coverage cannot extend to Ohio, North Dakota, Washington, or Wyoming. To cover a worker there, the employer must (1) buy a separate policy from the state fund - private WC is prohibited; (2) add stop gap employers liability to its CGL; and (3) it may not rely on the Item 3.C endorsement.
| State | Fund |
|---|---|
| Ohio | Bureau of Workers' Compensation (BWC) |
| North Dakota | Workforce Safety & Insurance (WSI) |
| Washington | Department of Labor & Industries (L&I) |
| Wyoming | Department of Workforce Services |
State funds provide Coverage A only, never employers liability - hence the stop-gap requirement.
Federal Workers' Compensation Programs
Four federal acts override state comp for specific occupations. Two are no-fault; two are negligence suits.
USL&H Act (Longshore and Harbor Workers' Compensation Act, 1927)
- Covers: longshore, harbor, ship builders/repairers/breakers, and workers on or adjoining navigable U.S. waters (piers, wharves, dry docks, terminals)
- Excludes: seamen and crew (Jones Act)
- Benefits: no-fault, structured like state comp, tied to the national average weekly wage with a statutory maximum
- How it attaches: the Longshore and Harbor Workers' Compensation Act Coverage Endorsement (WC 00 01 06) added to the WC policy
- The Outer Continental Shelf Lands Act (OCSLA) extends USL&H to workers on fixed offshore platforms
Jones Act (Merchant Marine Act, 1920)
- Covers: seamen - a master or member of the crew of a vessel
- Negligence-based: the seaman must prove employer negligence or vessel unseaworthiness, but may then recover pain and suffering
- Mutually exclusive with USL&H: a worker fits one or the other, never both
FELA (Federal Employers Liability Act)
- Covers: interstate railroad workers
- Negligence-based, not no-fault; the worker proves the railroad's negligence and may recover pain and suffering that can far exceed scheduled comp benefits
FECA (Federal Employees' Compensation Act)
- Covers: civilian federal government employees
- No-fault, administered by the U.S. Department of Labor
Federal Acts at a Glance
| Act | Worker | No-Fault? | Pain & Suffering? |
|---|---|---|---|
| USL&H | Longshore / harbor / ship repair | Yes | No |
| Jones Act | Seaman / vessel crew | No (negligence) | Yes |
| FELA | Interstate railroad | No (negligence) | Yes |
| FECA | Federal civilian employee | Yes | No |
Decision Map for the Exam
Work through worker type first, then geography:
- Railroad worker? -> FELA (prove negligence)
- Seaman / crew? -> Jones Act (prove negligence)
- Longshore / harbor / ship repair? -> USL&H (no-fault, WC 00 01 06)
- Federal civilian? -> FECA
- State worker traveling out of state? -> Other States Coverage if the state is in Item 3.C and not monopolistic; if monopolistic, buy from the state fund plus stop gap.
Exam Key: The two negligence acts (Jones Act, FELA) are the only ones allowing pain-and-suffering recovery; the two no-fault acts (USL&H, FECA) pay a benefit schedule like state comp. In dual-jurisdiction coastal states a waterfront injury can support both a USL&H and a state claim, but the worker cannot double-recover.
Why Other States Coverage Matters
Without Item 3.C, an employer that opens a new branch in a previously unlisted, non-monopolistic state would have no coverage there until it amended the policy - a dangerous gap if a worker is hurt on the first day. Other States Insurance closes that timing gap automatically. The carrier then picks up the new exposure at the year-end audit, charging premium on the new state's payroll at that state's rates. It is purely a convenience for non-monopolistic states; the four state-fund jurisdictions can never be added this way.
Two Other Geography Endorsements
When an employer's home-state employee is temporarily injured working in a different state, the policy normally pays under the state of hire / state of injury rules built into Item 3.A and 3.C. Two endorsements round out the picture: the All States Endorsement approach (listing 'all states except 3.A and monopolistic' in 3.C) maximizes flexibility, and an Admitted/Reciprocal arrangement may let a worker briefly in another state remain under the home-state act under an extraterritorial-reciprocity provision.
The exam rarely tests the endorsement numbers here, but does test the principle: the worker's job classification and state listings - never the mere location of an accident - decide which act and which state's benefits apply.
Federal Acts: Choosing the Right One
The single most common federal-acts question gives a worker description and asks which act applies. Anchor on the occupation: a brakeman or conductor for an interstate railroad is FELA; a deckhand, mate, or engineer assigned to a vessel in navigation is a seaman under the Jones Act; a stevedore loading cargo dockside is USL&H; a postal clerk or VA hospital nurse is a federal civilian under FECA. The trap answer always offers a no-fault label for FELA or the Jones Act, or claims the Jones Act and USL&H overlap - both are wrong.
A California employer's workers occasionally travel to Ohio to perform short jobs. How does the employer properly arrange Ohio workers' compensation coverage?
Which federal law covers a longshore worker injured while loading a cargo vessel on navigable U.S. waters, and how is it added to a standard policy?