13.4 Other States, USL&H, and Federal Acts

Coverage Beyond the Home State

Part One only covers states listed in Item 3.A. of the Information Page. Employers that send workers across state lines need a way to cover states not yet listed. That is the role of Part Three — Other States Insurance.

Part Three — Other States Insurance

Item 3.C. of the Information Page lists the Other States coverage. If a state is named in 3.C., the policy will respond if the employer begins operations there during the term, as though that state had been listed in 3.A.

• If a state is listed in 3.A. -> full Part One coverage now.
• If a state is listed in 3.C. -> coverage available if operations begin there mid-term.
• If a state is in neither -> a serious gap; the employer must endorse the policy or buy coverage there.

Monopolistic states (states that sell WC only through a state fund) cannot be covered by Part Three and are never listed in 3.A. of a private policy. Historically these include Ohio, North Dakota, Washington, and Wyoming.

Stop Gap (Employers Liability in Monopolistic States)

Because a monopolistic state fund provides only the statutory benefits (the Part One equivalent) and not employers liability, a gap exists for liability suits. Stop Gap coverage fills it — it provides the Part Two (Employers Liability) protection that the monopolistic state fund omits. Stop Gap is often added by endorsement to the WC policy or to the CGL policy.

USL&H — The Longshore Act

The U.S. Longshore and Harbor Workers Compensation Act (USL&H) is a federal law covering maritime workers on navigable waters and adjoining areas (piers, docks, terminals, shipyards) who are not crew members of a vessel. State WC does not apply to these workers, so coverage must be added by the USL&H endorsement (WC 00 01 06), which extends Part One to pay benefits the federal Act requires.

USL&H benefits are higher than typical state benefits, so it carries additional premium. Do not confuse USL&H workers with vessel crew.

The Jones Act and Other Federal Acts

• Jones Act (Merchant Marine Act) — covers crew members of a vessel (seamen). Crew are NOT covered by USL&H or state WC; the Jones Act lets an injured seaman sue the employer for negligence, so coverage is added through the Maritime Coverage Endorsement to Part Two, not a no-fault benefit.
• Federal Employers Liability Act (FELA) — covers interstate railroad workers; also a fault-based liability law, not no-fault WC.
• Federal Employees Compensation Act (FECA) — covers civilian federal government employees through the U.S. government, not a private policy.
• Defense Base Act (DBA) — extends USL&H to civilians on overseas U.S. military bases / government contracts.

Quick-Reference Table

Why the Monopolistic-State Gap Matters

The monopolistic-state problem is a favorite exam item. In Ohio, North Dakota, Washington, and Wyoming an employer must buy the statutory benefits from the state fund and cannot place Part One with a private insurer for those states. But the state fund provides only the no-fault benefit equivalent - it does not include Employers Liability.

That leaves the employer exposed to the third-party-over actions, consortium claims, and dual-capacity suits that Part Two normally covers. Stop Gap coverage, added by endorsement to a private CGL or a separate policy, supplies the missing Employers Liability protection. So an employer operating in a monopolistic state typically needs two pieces: state-fund statutory coverage plus Stop Gap for liability.

Distinguishing No-Fault From Fault-Based Federal Acts

The cleanest way to keep the federal acts straight is to sort them by fault basis. USL&H, the Defense Base Act, and FECA are no-fault systems that pay statutory benefits like state workers compensation. The Jones Act and FELA are fault-based - they let an injured seaman or railroad worker sue the employer for negligence, so they are insured through liability endorsements rather than no-fault benefits.

When a question describes a vessel crew member or a railroad worker suing for negligence, route it to the Jones Act or FELA and the Maritime/liability endorsement; when it describes a dockworker or overseas-base civilian receiving benefits without proving fault, route it to USL&H or the Defense Base Act.

Coordinating Coverage for Mobile Workforces

Employers whose workers cross state and national lines must layer several solutions: list current states in 3.A., add likely states in 3.C. for Other States coverage, attach the USL&H endorsement for maritime exposures, and add Foreign Voluntary Compensation for employees temporarily abroad. A construction firm bidding work in a new state should confirm that state is at least in 3.C. before mobilizing, because beginning operations in an unlisted, non-monopolistic state leaves an uninsured statutory exposure until the policy is endorsed.