13.4 Other States, USL&H, and Federal Acts

Extending Coverage Beyond the Home State

Part One only responds to states listed in Item 3.A. of the Information Page. To protect an employer that may operate in additional states, the policy uses Other States Insurance in Item 3.C. Federal jobs and certain maritime work fall outside state acts entirely and require named federal coverages by endorsement.

Other States Insurance (Item 3.C.)

Other States Insurance extends Part One benefits to states listed in Item 3.C. if the employer begins operations there during the policy term.

• It does not cover monopolistic-fund states, where coverage must be bought from the state fund.
• It does not retroactively cover a state the insurer knew about at inception that was left off — that state should be in 3.A.

Exam trap: list every known state in 3.A.; use 3.C. for states that might be entered later. A common practice is to write "all states except" the monopolistic ones plus the home state.

Monopolistic Fund States and Stop Gap

Four jurisdictions are monopolistic-fund states — North Dakota, Ohio, Washington, and Wyoming — where employers must buy workers comp from the state fund, not a private insurer. The state fund provides no Part Two (Employers Liability). To fill that hole, employers buy Stop Gap Employers Liability coverage, usually by endorsement on the Commercial General Liability policy. This is a frequent exam point.

Federal Workers Compensation Acts

Some workers are covered by federal statutes, not state law. Know these by name:

USL&H is added by the Longshore and Harbor Workers' Compensation Act Coverage Endorsement; it is no-fault. Jones Act and FELA require the worker to prove employer negligence.

Reporting and Notice Requirements

Other States Insurance is not automatic protection for forgotten states. The policy requires the employer to notify the insurer at once if work begins in a 3.C. state so coverage can be confirmed and premium charged. If a state appears in neither 3.A. nor 3.C., the employer may face an uninsured exposure there and lose its statutory defenses. Producers should review an insured's expansion plans at renewal and add likely states to 3.A. and the catch-all to 3.C.

Fault-Based Federal Remedies Compared

A recurring exam distinction: state workers comp, FECA, USL&H, and Black Lung are no-fault, while the Jones Act and FELA are negligence statutes. A seaman or railroad worker must prove the employer's negligence to recover, but the burden is relaxed (FELA uses a "featherweight" causation standard). Maritime jobs can straddle two acts: a worker on a vessel is a seaman under the Jones Act, while a worker on the dock is covered by USL&H. Coverage for these federal exposures is added to the standard policy by endorsement, not assumed automatically.

The Three-Item Geography of Coverage

A clean mental model ties the whole topic together:

If an employer begins operations in a state listed in neither 3.A. nor 3.C., it has an uninsured workers comp exposure there, loses its statutory defenses, and faces fines and direct employee suits. The producer's renewal job is to push every known state into 3.A. and add an "all states except" catch-all (excluding monopolistic and the home state) into 3.C.

Monopolistic-Fund Memory Hook and the Stop-Gap Hole

The four monopolistic-fund states — North Dakota, Ohio, Washington, Wyoming (mnemonic "NOWW") — sell workers comp only through the state fund, which provides no employers liability (Part Two). That gap is filled by Stop-Gap Employers Liability, endorsed onto the CGL policy, not the comp policy.

A common multi-step exam item describes an Ohio employer sued in a third-party-over action and asks where the employers-liability defense comes from — the answer is the CGL Stop-Gap endorsement, because the Ohio state fund will not respond. (Note: monopolistic-state lists have shifted historically, so memorize the four currently tested as NOWW.)

No-Fault vs. Negligence — A Closing Drill

State comp, FECA, USL&H, and Black Lung are no-fault: the worker need only show the injury arose out of and in the course of employment. The Jones Act (seamen) and FELA (interstate railroad workers) are negligence remedies: the worker must prove employer fault, though FELA uses a relaxed "featherweight" causation standard that makes recovery easier than ordinary tort. A worker injured on a vessel in navigation is a seaman (Jones Act); a worker injured loading or repairing on the dock is covered by USL&H. Pinning the right act to the right location and fault standard is the recurring federal-acts question.