13.4 Other States, USL&H, and Federal Acts

Information Page States: 3.A vs 3.C

The policy's declarations (the Information Page) list states in two distinct places that the exam loves to contrast:

Quick Answer: Put a state in 3.A if you already operate there. List a state in 3.C if you might expand there, so a worker hired in that new state is covered immediately rather than uninsured.

The Other States Trap

If the employer enters a state that is neither in 3.A nor 3.C, there is no coverage for a claim there until the policy is endorsed. Some insurers write "all states except those listed in 3.A and the monopolistic states" in 3.C to maximize protection.

Monopolistic states cannot appear in Item 3.C. In a monopolistic state, coverage must be bought from the state fund, not a private insurer.

Memory aid for the four monopolistic states: N-O-W-W — North Dakota, Ohio, Washington, Wyoming. (Historically called the "monopolistic four.")

Federal Maritime and Railroad Acts

The type of worker, not the place of the accident, decides which federal system applies. Two of these replace no-fault with a negligence lawsuit — the most tested distinction.

USL&H Coverage and Endorsement

The United States Longshore and Harbor Workers' Compensation Act (USL&H) is a federal no-fault program for maritime workers who are not seamen — those loading, repairing, or building vessels on or near navigable waters.

• It pays higher benefit levels than most state acts.
• It is added to the standard policy by the Longshore and Harbor Workers' Compensation Act Coverage Endorsement, WC 00 01 06.
• The endorsement is shown by listing the act in the policy and charging the USL&H rate (a multiple of the state rate).

Drawing the Line: Seaman vs Shore Worker

The boundary between the Jones Act and USL&H is heavily tested:

• A seaman — a crew member with a substantial connection to a vessel in navigation — is covered by the Jones Act and must sue and prove negligence.
• A shore-side maritime worker (longshoreman, ship repairer) is covered by USL&H, a no-fault system.
• A purely land-based worker injured nowhere near navigable waters stays under the state act.

Exam trap: The Jones Act and FELA do not pay automatic benefits. They give the worker the right to sue the employer for negligence — the opposite of the no-fault bargain.

A practical consequence is how each risk is insured. A railroad insures its FELA exposure through railroad protective / FELA liability coverage, and a vessel owner insures Jones Act crew through Protection & Indemnity (P&I) and a Maritime Employers Liability (MEL) endorsement, because the standard policy's Part One only promises statutory benefits and there is no comp statute for seamen or railroaders. USL&H workers, by contrast, fit onto the standard policy through endorsement WC 00 01 06 because USL&H is itself a no-fault benefit schedule.

FECA, the Defense Base Act, and Black Lung

A few more federal acts round out the list:

• FECA (Federal Employees' Compensation Act) — the no-fault system for civilian employees of the federal government, administered by the Department of Labor.
• Defense Base Act — extends USL&H-style coverage to civilian contractors working on U.S. military bases or public-works projects overseas.
• Black Lung Benefits Act — pays coal miners disabled by pneumoconiosis; funded partly by a coal excise tax.
• Outer Continental Shelf Lands Act — applies USL&H to workers on offshore drilling platforms beyond state waters.

Worked Scenario

An employer headquartered in California (listed in 3.A) wins a contract to repair ships at a harbor in Oregon. Oregon is listed in 3.C, and the dock workers handle vessels on navigable waters.

• Because Oregon is in 3.C, Other States coverage activates Part One for the Oregon operation — no coverage gap.
• Because the dock/ship-repair workers are on navigable waters, USL&H applies; the policy must add endorsement WC 00 01 06 and charge the USL&H rate.
• If the firm also hired a crew member to sail a tug, that person is a seaman under the Jones Act, outside both the state act and USL&H — covered instead through Part Two / a maritime employers liability endorsement.

Choosing 3.A vs 3.C

The Information Page question is really an operations question. List a state in Item 3.A if the employer already has payroll there, giving full Part One statutory coverage. List a state in Item 3.C if the employer might expand there, so a worker hired in the new state is covered the moment operations begin rather than facing a gap. A state in neither item has no coverage until the policy is endorsed, and the four monopolistic states - North Dakota, Ohio, Washington, Wyoming - can never appear in 3.C because coverage there must come from the state fund.

Worker Type Selects the Federal System

For maritime and railroad exposures, the type of worker decides the system, not the place of injury. A shore-side maritime worker - longshoreman or ship repairer on navigable waters - is covered by the no-fault USL&H Act added through endorsement WC 00 01 06. A vessel crew member is a seaman under the Jones Act and must sue for negligence, insured through P&I and a maritime employers liability endorsement. An interstate railroad worker sues under FELA. Federal civilian employees use the no-fault FECA.

Memorize which programs are no-fault and which require a negligence suit, because that single distinction drives most federal-act questions.