13.4 Other States, USL&H, and Federal Acts

Nevada employers rarely confine operations to a single state. A Henderson general contractor sends crews to Utah job sites, a Reno logistics firm loads cargo at West Coast ports, and a Las Vegas hotel hires temporary staff through out-of-state vendors. The standard NCCI workers compensation policy uses the Information Page to define where Part One applies and how expansion into additional states is handled. The Nevada Property/Casualty combo exam frequently pairs a worker description with a location and asks which law governs — and whether benefits are no-fault or fault-based.

Controlling Coverage Territory

The Information Page is the map for workers comp territory:

Part Three is not automatic for every state. It only covers states properly listed in Item 3.C. If a Nevada contractor opens a satellite office in Arizona and Arizona appears in neither 3.A nor 3.C, there is a coverage gap — a favorite exam trap.

Producers commonly list Nevada in Item 3.A and enter "all states except those listed in 3.A and monopolistic states" in Item 3.C to protect against expansion surprises. Part Three responds to new operations during the term; it does not rewrite the policy for states already active at inception (those belong in 3.A).

Nevada scenario: A Las Vegas electrical contractor insured with Nevada in Item 3.A expands into California mid-term. California is listed in Item 3.C. A California employee's injury triggers Part Three Other States coverage, and benefits follow California law. Had California been omitted from both items, the employer would owe benefits with no Part One response from the policy.

Monopolistic State Funds and Stop-Gap Coverage

Four states operate monopolistic state funds for workers compensation: North Dakota, Ohio, Washington, and Wyoming. Employers in those states must purchase statutory benefits from the state fund, not from a private insurer's Part One.

The standard NCCI policy cannot provide Part One in monopolistic states. Employers still need employers liability (Part Two) protection because the state fund pays statutory benefits but does not provide the tort shield Part Two offers. The solution is a stop-gap endorsement attached to the employer's general liability or workers comp policy, which adds employers liability coverage for operations in monopolistic states.

Exam trap: You cannot list a monopolistic state in Item 3.C for Part Three coverage the way you would an open-market state. The employer must comply with that state's fund requirements separately.

Maritime and Federal Workers

Workers on or near navigable waters fall outside ordinary state comp. The exam tests three maritime-related frameworks:

USL&H coverage is added to the state policy by the Longshore and Harbor Workers Compensation Act Coverage Endorsement (WC 00 01 06 A). The Jones Act covers seamen — workers who have a substantial connection to a vessel in navigation. A dockside stevedore loading cargo is USL&H, not Jones Act. A cook on a commercial fishing boat is Jones Act, not state comp.

The decisive exam contrast: USL&H, FECA, state comp, and the Defense Base Act are no-fault — the worker receives benefits without proving employer negligence. The Jones Act and FELA are fault-based — the worker must prove the employer's negligence caused the injury. Examiners swap these pairs constantly.

Worked example: A warehouse worker at the Port of Long Beach slips on a wet dock adjoining navigable water. USL&H governs (no-fault). A deckhand on a Lake Mead tour boat injured while the vessel is in navigation is a seaman under the Jones Act (must prove negligence). A Union Pacific conductor injured in an interstate derailment near Elko falls under FELA (fault-based). A civilian employee at Nellis Air Force Base is covered by FECA (no-fault federal system).

Assigned Risk and Second Injury Funds

Employers rejected by the voluntary market obtain coverage through the state's assigned risk plan (residual market). The plan assigns the employer to a participating insurer or a servicing carrier. Premiums are higher, and schedule credits are limited, creating strong incentive to improve safety and re-enter the voluntary market.

Many states, including Nevada, maintain a Second Injury Fund (subsequent injury fund). If a worker with a pre-existing impairment suffers a new work injury, and the combination produces greater disability than the second injury alone would cause, the fund pays the excess portion. The employer's insurer pays only for the second injury standing alone.

Worked example: A worker who previously lost vision in one eye loses vision in the other eye in a workplace accident, resulting in total blindness. The employer's insurer pays benefits as if only the second-eye injury occurred. The Second Injury Fund pays the additional disability attributable to the combination. This encourages hiring workers with prior impairments without penalizing the employer's experience mod for the full combined disability.

Mapping Workers to the Correct System — Exam Checklist

When the exam describes a worker, follow this sequence:

1. Location — on navigable water, adjoining area, vessel, railroad, federal facility, overseas base, or ordinary workplace?
2. Worker classification — longshore, seaman, railroad, federal civilian, or standard employee?
3. Fault test — no-fault (state comp, USL&H, FECA, Defense Base Act) or negligence (Jones Act, FELA)?
4. Policy territory — is the state in Item 3.A, Item 3.C, or neither?

Common traps:

• Confusing USL&H (dockside, no-fault) with the Jones Act (seaman, fault).
• Assuming Part Three covers a state not listed in Item 3.C.
• Believing a monopolistic state can be insured through standard Part One.
• Forgetting that FELA requires proving negligence, unlike state comp.

Nevada producers placing coverage for multi-state contractors, hospitality companies with out-of-state vendors, and firms with any maritime or federal exposure must verify Information Page state listings, add USL&H or maritime endorsements when needed, and understand which workers fall outside Nevada's statutory system entirely.