13.4 Other States, USL&H, and Federal Acts

Geography Lives on the Information Page

Where the WC policy applies turns on the numbered items of the Information Page:

Other States Coverage responds when an employee travels or temporarily works outside the home state, paying benefits under that state's law. A state in neither 3.A nor 3.C, where the employer was already operating at inception, is uninsured — the exact gap Item 3.C closes for future expansion.

Exam Key: A state must appear in 3.A or 3.C for the policy to respond there.

The Monopolistic States

Other States Coverage cannot extend to the four monopolistic-fund states — private WC is prohibited there:

To cover a worker in a monopolistic state the employer must (1) buy from the state fund directly and (2) add stop-gap employers liability to its CGL — because state funds provide Coverage A only, never employers liability. It may not rely on the Item 3.C endorsement.

Stop-gap fills exactly the hole the monopolistic fund leaves: the fund pays statutory benefits to the worker (Part One equivalent), but it will not respond to a third-party-over action, consortium claim, or other employers-liability suit. Without stop-gap on the CGL, the employer in Ohio, Washington, Wyoming, or North Dakota would be self-insured for those tort exposures. Puerto Rico and the U.S. Virgin Islands operate similar government monopolies, so the same buy-from-the-fund logic applies there.

Mnemonic: 'WWND' — Washington, Wyoming, North Dakota, Ohio are the monopolistic four.

Federal Workers' Compensation Acts

Four federal laws override state comp for specific workers. Two are no-fault; two are negligence suits that allow pain and suffering:

• USL&H Act (1927): covers workers on or adjoining navigable U.S. waters; no-fault; added by the Longshore endorsement (WC 00 01 06). OCSLA extends it to fixed offshore platforms.
• Jones Act (1920): covers seamen (master/member of a vessel's crew); negligence-based; mutually exclusive with USL&H.
• FELA: interstate railroad workers; negligence-based.
• FECA: civilian federal employees; no-fault, administered by the U.S. DOL.

Decision Map

Work through worker type first, then geography:

1. Railroad worker? → FELA (prove negligence)
2. Seaman / vessel crew? → Jones Act (prove negligence)
3. Longshore / harbor / ship repair on navigable waters? → USL&H (no-fault, WC 00 01 06)
4. Federal civilian? → FECA
5. Otherwise a state worker 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.

Dual Jurisdiction

In some coastal states a single waterfront injury can support claims under both USL&H and state comp. The worker generally cannot double-recover but may select the more favorable forum. USL&H benefits are tied to the national average weekly wage with a statutory maximum and are administered by the U.S. DOL's Office of Workers' Compensation Programs.

The status and situs test decides USL&H coverage: the worker must have maritime employment status (longshore, ship repair, harbor work) and be injured on a covered maritime situs (the waters or adjoining piers, wharves, dry docks, and terminals). A clerical or recreational worker on the dock may fail the status test and fall back to ordinary state comp, which is exactly the kind of line-drawing the exam likes to test.

Trap: Jones Act and USL&H never overlap — 'master or member of the crew of any vessel' is the Jones Act test that excludes USL&H. Only the two negligence acts (Jones, FELA) allow pain-and-suffering damages.

Other-States Coverage and Monopolistic Funds

Because WC is state-specific, an employer operating in multiple states must list each one. Part Three - Other States Insurance extends Part One benefits to states named in the policy where the employer may expand, closing the gap before operations begin. The trap: a handful of states run monopolistic state funds (the employer must buy coverage from the state, not a private insurer) - these cannot be added to Part Three and require separate state-fund policies. Employers in those states also need a separate Stop Gap (employers liability) endorsement because the monopolistic fund provides no Part Two.

Federal Workers' Compensation Acts

Several federal acts override state WC for specific worker classes, and matching the worker to the act is a steady exam item:

USL&H vs. the Jones Act

The most tested federal distinction is USL&H vs. Jones Act. USL&H is a no-fault, benefit-schedule system (like state WC) for longshoremen, harbor workers, shipbuilders, and ship-repairers working on or adjacent to navigable waters. The Jones Act is not a no-fault system - it gives a seaman (a crew member of a vessel in navigation) a negligence cause of action against the employer, more like a tort suit than WC.

Endorsing the WC Policy for Federal Acts

Federal coverage is added by endorsement to the standard WC policy - the USL&H endorsement for longshore exposure, the Maritime Coverage endorsement for Jones Act/seaman exposure, and the Federal Employers Liability Act endorsement for railroad workers. A candidate should recognize that a dockside ship-repairer needs the USL&H endorsement, while a crew member of a fishing vessel needs Jones Act (maritime) coverage - confusing the two is a frequent wrong answer.