13.4 Other States, USL&H, and Federal Acts

The Coverage Territory Problem

Part One only covers states listed in Item 3.A. of the Information Page. If an employee is hurt while working in a state not listed, there may be no coverage under Part One there. Workers compensation is therefore highly state-specific, and the policy provides two devices for multistate operations: the Other States Insurance (Part Three) and a separate state endorsement for any state added later.

Other States Insurance (Part Three)

Item 3.C. of the Information Page lists the Other States states. Part Three extends Part One/Two coverage to those listed states as if they were in Item 3.A. — but only to states named there. Key exam rules:

• A state listed in both 3.A. and 3.C. is covered as a primary state.
• You may list "all states except those in 3.A. and monopolistic states" to capture incidental expansion automatically.
• A monopolistic-fund state can NEVER be added through Other States Insurance — coverage there must come from the state fund directly.
• If operations begin in a state listed in neither 3.A. nor 3.C., the insured must notify the insurer, who endorses the policy; coverage may be limited until then.

USL&H — Longshore and Harbor Workers

The U.S. Longshore and Harbor Workers' Compensation Act (USL&H) is a federal workers compensation law covering maritime workers (loading, unloading, building, repairing vessels) on the navigable waters of the U.S. and adjoining piers, docks, and terminals — but not the crew of a vessel. Coverage is added by the Longshore and Harbor Workers' Compensation Act Coverage Endorsement (WC 00 01 06). USL&H benefits are generally higher than state-act benefits, so a separate endorsement and higher rate apply. A worker covered by USL&H is not covered by the state act for the same injury.

Major Federal Acts to Memorize

The Jones Act / USL&H / FELA Trap

Examiners love the distinction between no-fault and negligence federal remedies:

• USL&H and FECA are no-fault (true workers compensation) — pay benefits regardless of fault.
• Jones Act (seamen) and FELA (railroad workers) are fault-based negligence remedies — the worker must prove employer negligence to recover damages, and these are handled through liability coverage, not the standard WC policy. Memorize: crew of a vessel = Jones Act (not USL&H); railroad = FELA.

Other States Insurance — Item 3.C.

Because Part One covers only the states listed in Item 3.A., the Other States Insurance (Item 3.C.) provision extends statutory coverage to states the employer might expand into during the term, except monopolistic states and states already listed. Listing "all states except [3.A. states] and monopolistic states" in Item 3.C. is the standard way to avoid a coverage gap when an employee is suddenly sent to a new state.

Monopolistic State Funds

A handful of monopolistic states require employers to buy workers comp only from the state fund, not private insurers; the NCCI policy cannot be used there, and employers liability in those states is obtained via a stop-gap endorsement on the CGL. Knowing that you cannot insure a monopolistic-state exposure on the standard WC policy is a frequent exam point.

Federal Compensation Acts

Certain workers are covered by federal acts rather than state statutes, added by endorsement:

Recognizing that longshore, seamen, and railroad workers fall under federal acts — and require specific endorsements — separates the routine state exposure from the federal exposures the exam plants in maritime and railroad scenarios.

Extraterritorial and Reciprocity Rules

When an employee normally working in one state is temporarily sent to another, extraterritorial provisions and interstate reciprocity agreements usually let the home-state coverage follow the worker for a limited period, avoiding duplicate filings. Some states require a temporary in-state policy beyond a threshold of days or a fixed worksite. Properly listing exposure states in Item 3.A. and using Item 3.C. (Other States Insurance) for possible expansion is the producer's tool for ensuring an injured traveling employee is covered under the correct state's statute — a recurring multi-state exam scenario.