13.4 Other States, USL&H, and Federal Acts

Part Three — Other States Insurance

Part One only covers the states listed in Item 3.A of the Information Page. If an employer sends workers into an unlisted state and an injury occurs there, Part One does not respond. Part Three — Other States Insurance bridges this by extending coverage to states listed in Item 3.C. Underwriters typically list "all states except" the monopolistic states and any state where the employer already has operations (which belong in 3.A).

Key rule: if an employer begins operations in a 3.C state after the policy starts, coverage applies only if the insured notifies the insurer within the required period (commonly 30 days). A state can never be in both 3.A and 3.C, and the four monopolistic-fund states can be in neither.

Monopolistic State Funds

A few states require employers to buy comp only from a state fund — private insurers cannot write Part One there. These monopolistic jurisdictions are commonly tested as: North Dakota, Ohio, Washington, and Wyoming (plus the territories of Puerto Rico and the U.S. Virgin Islands). Because private Part One is unavailable, employers in these states buy statutory coverage from the fund and may buy a separate Stop Gap endorsement from a private insurer to provide employers liability (Part Two-type) protection, which the state fund does not include.

Exam trap: monopolistic-fund states have no employers liability built in — Stop Gap or a CGL endorsement supplies it.

Federal Workers Compensation Acts

State comp acts do not reach certain federal-jurisdiction workers. Several federal acts apply instead, and the standard policy is endorsed to pick them up:

USL&H Coverage Detail

USL&H provides higher statutory benefits than most state acts and applies to longshoring, ship repair, shipbuilding, and harbor work. It is added by the USL&H Coverage Endorsement (WC 00 01 06), which amends Part One to include the federal act for the workers and locations described. Because USL&H benefits exceed state benefits, premium for USL&H exposure is rated separately at higher rates.

The "twilight zone" overlap — workers who could fall under both state and USL&H jurisdiction — is why employers near navigable waters routinely add the endorsement: if any worker turns out to be USL&H-covered, the unendorsed policy would not pay the federal benefit.

Distinguishing Crew vs. Shore Workers (Common Trap)

The single most-tested federal distinction:

• A crew member / seaman of a vessel is covered by the Jones Act (a negligence/tort remedy) — not USL&H.
• A longshoreman or harbor worker on the dock or loading the vessel is covered by USL&H (no-fault federal comp).

If the question describes someone who works aboard and in service of the vessel, choose the Jones Act. If the person works on shore handling cargo or repairing ships, choose USL&H.

Why Federal Acts Exist Alongside State Comp

State workers compensation laws do not reach certain workers whose employment falls under federal jurisdiction - maritime workers, longshoremen, interstate railroad employees, and federal civilian employees. Congress enacted separate federal compensation acts for these groups, and the standard Workers Comp policy must be endorsed to cover the federal exposures because Part One responds only to the state acts listed in the declarations. Identifying which act applies to which worker is a recurring exam task.

USL&H and the Jones Act

The United States Longshore and Harbor Workers Compensation Act (USL&H) is a federal no-fault comp system covering maritime workers injured on navigable waters or adjoining areas (docks, piers, terminals) - longshoremen, ship repairers, harbor construction workers - who are not crew members. Coverage is added by the USL&H endorsement to the comp policy. By contrast, the Jones Act (Merchant Marine Act) covers seamen (crew members of a vessel) and is fault-based, allowing the injured seaman to sue the employer for negligence rather than receiving no-fault benefits.

The crew-member-versus-shoreside-worker distinction determines which applies.

Other Federal Compensation Acts

Additional federal acts the exam may name include the Federal Employers Liability Act (FELA) for interstate railroad workers (fault-based, like the Jones Act, requiring proof of employer negligence), the Federal Employees Compensation Act (FECA) for federal civilian employees, the Defense Base Act for workers on overseas military bases, and the Federal Black Lung (Coal Mine Health and Safety) Act for coal miners with pneumoconiosis.

The key conceptual sort: no-fault acts (USL&H, FECA, state comp) pay statutory benefits without proving negligence, while the fault-based acts (Jones Act, FELA) require the worker to prove the employer was negligent.

Matching the Worker to the Correct Act

The cleanest way to handle federal-act questions is to sort by the worker's job and the fault standard. A seaman/crew member on a vessel falls under the fault-based Jones Act; a dockside maritime worker (longshoreman, ship repairer) falls under the no-fault USL&H Act; an interstate railroad worker falls under the fault-based FELA; a federal civilian employee falls under the no-fault FECA; and a coal miner with black lung falls under the Black Lung Act. State workers comp covers everyone else.

A single exam item may list four workers and ask which one is covered by a particular act, so memorizing the job-to-act pairing and which acts are fault-based is essential.