13.4 Other States, USL&H, and Federal Acts
Key Takeaways
- Item 3.A lists current-operation states (full Part One); Item 3.C Other States Insurance extends coverage to newly entered states automatically.
- Monopolistic states (North Dakota, Ohio, Washington, Wyoming) require coverage from the state fund and cannot be listed in 3.C.
- State funds sell Part One only; employers buy Stop Gap coverage for Part Two employers liability.
- USL&H is federal no-fault for longshore workers; Jones Act (seamen) and FELA (railroad) require negligence lawsuits.
Where the Policy Applies: Item 3.A vs. Item 3.C
The Information Page of the standard WC policy controls geography through Item 3:
| Item | Name | Function |
|---|---|---|
| 3.A | Primary / listed states | States where the employer has operations at inception; Part One applies in full |
| 3.C | Other States Insurance | States that may be entered later; provides automatic coverage if work begins there during the term |
Item 3.A lists the states where you do business now. Item 3.C is the Other States endorsement that extends Part One to newly entered states so a worker hurt there is not stranded without statutory coverage.
How to Use Other States Insurance
Worked scenario: a California employer (CA listed in 3.A) occasionally sends crews to Ohio for short jobs. Ohio should be added to Item 3.C so coverage attaches automatically the moment work begins there.
Critical trap: Item 3.C does NOT apply to monopolistic states. If the new state requires coverage through a state fund (see below), the employer must buy from that fund directly; Other States Insurance cannot list a monopolistic state. You also cannot use 3.C for a state already shown in 3.A.
Monopolistic State Funds
A handful of states do not permit private WC insurance; the employer must buy coverage from the state fund. The traditional monopolistic states are North Dakota, Ohio, Washington, and Wyoming (Puerto Rico and the U.S. Virgin Islands are also monopolistic).
Problem: state funds sell Part One only — they do not provide employers liability. In a monopolistic state the employer secures Part Two (Employers Liability) by buying Stop Gap coverage, usually endorsed onto the CGL policy or a separate employers liability policy. Memorize the acronym "ND OW" (North Dakota, Ohio, Washington, Wyoming) to recall the four traditional monopolistic states.
Maritime and Federal Acts
State WC laws do not reach certain federal workers. Know these by name and who they cover:
| Act | Covers | Key feature |
|---|---|---|
| USL&H Act | Longshore / harbor workers on navigable waters and adjoining docks | Federal no-fault benefits; added by USL&H endorsement |
| Jones Act | Crew members (seamen) of a vessel | NOT no-fault — lets a seaman SUE the employer for negligence |
| FELA | Interstate railroad workers | NOT no-fault — negligence suit, comparative fault |
| Federal Black Lung | Coal miners | Occupational disease benefits |
| FECA | Civilian federal employees | Administered by U.S. Dept. of Labor |
USL&H vs. Jones Act: The Tested Distinction
A longshore worker injured while loading a cargo vessel on navigable U.S. waters is covered by the USL&H Act, a federal no-fault benefit program added to the policy by the USL&H endorsement (which removes the policy exclusion for federal maritime acts).
The Jones Act covers seamen / crew members of a vessel and is fundamentally different: it is NOT no-fault. A Jones Act seaman must sue the employer for negligence to recover, much like FELA for railroad workers. Exam trap: USL&H = no-fault statutory benefits; Jones Act and FELA = negligence lawsuits. Confusing the two is the most common federal-act error.
Extraterritorial and Reciprocity Rules
What happens when a worker hired in one state is injured in another? Most states apply extraterritorial provisions: a worker temporarily sent out of state stays under the home-state law for a defined period, so the employer is not forced to insure under two systems for a brief trip. Conversely, reciprocity agreements let a visiting employer avoid local coverage if its home state extends benefits and the host state recognizes that coverage.
When the trips are not brief, the correct fix is Item 3.C Other States Insurance or adding the state to 3.A. Failing to address a regular out-of-state exposure leaves a gap: a worker injured in an unlisted, non-3.C state may have no automatic coverage, exposing the employer to a benefit obligation it must pay out of pocket.
A manufacturer operates a plant in Washington, a monopolistic state. How does it secure employers liability (Part Two) protection?
Which federal law covers a longshore worker injured while loading a cargo vessel on navigable U.S. waters, and how does it operate?
Item 3.A vs. 3.C and the Maritime/Federal Acts
The policy's Information Page controls where Part One applies. Item 3.A lists the states where coverage is primary (operations known at inception). Item 3.C – Other States Insurance extends Part One to states the insured later begins operating in, except any state already in 3.A or any monopolistic state fund. Listing a state in 3.A vs. relying on 3.C is a tested distinction: a brand-new operation in a state not listed in 3.A is covered only if 3.C names "all states except..." and that state is not monopolistic.
Monopolistic fund states (in 2026: North Dakota, Ohio, Washington, Wyoming) require employers to buy comp from the state fund, not a private insurer, so Other States Insurance cannot reach them.
USL&H vs. Jones Act (the maritime trap): The Longshore and Harbor Workers' Compensation Act (USL&H) is a no-fault federal comp law for maritime workers on navigable waters and adjoining piers/docks who are not crew. The Jones Act covers seamen (crew members of a vessel) and is a negligence-based tort remedy, not no-fault. Add USL&H coverage by endorsement for dock/shipyard workers; cover crew under the Jones Act (often via Maritime Employers Liability/protection-and-indemnity). The exam contrasts the no-fault USL&H with the fault-based Jones Act and asks which applies to a given worker.