13.4 Other States, USL&H, and Federal Acts
Key Takeaways
- Part Three Other States covers Item 3.C states when operations newly begin there; a state in neither 3.A nor 3.C has no coverage.
- Monopolistic states (ND, OH, WA, WY) require statutory WC from the state fund; private insurers sell Stop Gap employers liability there.
- USL&H (LHWCA) is no-fault federal WC for dock/harbor workers, added by endorsement WC 00 01 06, with higher benefits.
- Jones Act (seamen) and FELA (railroad workers) are negligence-based, unlike no-fault state WC and USL&H.
Part Three - Other States Insurance
Part One covers only the states listed in Item 3.A of the Information Page. If an employer expands into a new state not listed, there is a coverage gap. Part Three - Other States Insurance closes it: states listed in Item 3.C are automatically covered if operations begin there during the policy term.
Key rules tested:
- A state listed in 3.A is a named WC state; a state listed in 3.C is an other state covered only when operations newly begin there.
- A state listed in neither 3.A nor 3.C has no coverage.
- Monopolistic states cannot be listed in 3.C for statutory benefits (explained below).
Monopolistic vs. Competitive States
Most states are competitive - employers buy WC from private insurers (and possibly a state fund). A few are monopolistic: WC statutory benefits must be bought from the state fund, and private WC policies cannot provide Part One there.
The traditional monopolistic states are North Dakota, Ohio, Washington, and Wyoming (mnemonic: think of these four). In monopolistic states:
- Part One statutory coverage comes only from the state fund.
- Private insurers can still sell Stop Gap (employers liability) coverage, because the monopolistic state fund typically does not provide Part Two employers-liability protection. Stop Gap is often added by endorsement or via the CGL.
USL&H - The Longshore Act
The United States Longshore and Harbor Workers Compensation Act (USL&H or LHWCA) is a federal act covering maritime workers injured on the navigable waters of the U.S. or adjoining piers, docks, and loading areas - workers not seamen but who load, repair, or build vessels.
- USL&H is not automatically included in a state WC policy; it must be added by the USL&H Coverage Endorsement (WC 00 01 06).
- Benefits are generally higher than state benefits.
- It bridges the gap between purely land-based state WC and the seagoing crew covered by the Jones Act.
Other Federal Acts
| Act | Who it covers | Recovery basis |
|---|---|---|
| USL&H (LHWCA) | Dock/harbor/shipyard workers, not crew | No-fault, federal WC; endorsed onto WC policy |
| Jones Act (Merchant Marine Act) | Seamen / crew members of a vessel | Negligence suit against employer (not no-fault) |
| FELA (Federal Employers Liability Act) | Railroad workers | Negligence suit (not no-fault) |
| Defense Base Act | Employees on U.S. military bases overseas | Extends USL&H benefits |
| Federal Coal Mine (Black Lung) | Coal miners with pneumoconiosis | Federal benefits |
Trap: the Jones Act and FELA are fault-based - the worker must prove employer negligence to recover, unlike no-fault state WC and USL&H. Seamen use the Jones Act; railroad workers use FELA.
Mapping a Worker to the Right Law
Work through these in order on the exam:
- Is the worker a railroad employee? -> FELA (negligence suit).
- Is the worker a seaman / crew member of a vessel in navigation? -> Jones Act (negligence suit).
- Is the worker a maritime/dock worker who is not a crew member, injured on navigable waters or adjoining areas? -> USL&H (endorse WC 00 01 06).
- Is the worker on a U.S. base overseas? -> Defense Base Act (USL&H benefits).
- Otherwise a land-based employee -> state WC under Part One.
The distinction between crew member (Jones Act) and harbor worker (USL&H) is the single most tested maritime point.
Why Part Three Matters and the Federal-Act Map
Part Three (Other States Insurance) closes a dangerous gap: Part One covers only the states listed in the declarations, so an employer that sends a worker into an unlisted state — or expands operations mid-term — has no statutory coverage there unless that state appears in Part Three. Listing a state in Part Three (or using "all states except monopolistic and those listed in Part One") provides immediate coverage; a worker hurt in a monopolistic state (e.g., Ohio, North Dakota, Washington, Wyoming) must be covered by that state fund, never the private policy.
The federal-act map the exam tests: USL&H (maritime workers on navigable waters and adjoining piers/docks — added by the Longshore endorsement), the Jones Act (seamen, who sue the employer in negligence), the Defense Base Act (overseas government contractors), the Federal Employers Liability Act/FELA (interstate railroad workers, negligence-based), and the Federal Black Lung program (coal miners). Mapping a worker — dockworker vs. seaman vs. railroad employee — to the correct act is a signature WC question.
Worker-to-Law Decision Order Recap
On the exam, route an injured worker to the correct law in this order: (1) Is the worker a seaman in service of a vessel? → Jones Act (negligence suit against the employer). (2) A maritime worker loading/unloading or repairing vessels on navigable waters or adjoining docks? → USL&H. (3) An interstate railroad employee? → FELA (negligence-based). (4) An overseas government contractor? → Defense Base Act. (5) A coal miner with pneumoconiosis? → Federal Black Lung.
(6) Otherwise a land-based employee in a competitive state? → the state WC act via Part One, with Part Three covering additional listed states; a monopolistic state requires its state fund. Memorizing this decision tree turns a wordy fact pattern into a quick selection.
An employer based in a Part-3.A state begins operations in a new competitive state not listed anywhere on the Information Page. Where is statutory WC coverage provided?
A seaman who is a crew member of a vessel is injured due to the employer's negligence. Which law governs his recovery?