13.4 Other States, USL&H, and Federal Acts

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

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:

1. Is the worker a railroad employee? -> FELA (negligence suit).
2. Is the worker a seaman / crew member of a vessel in navigation? -> Jones Act (negligence suit).
3. 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).
4. Is the worker on a U.S. base overseas? -> Defense Base Act (USL&H benefits).
5. 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.