13.4 Other States, USL&H, and Federal Acts

The Two Items That Define State Coverage

The Information Page uses Item 3.A and Item 3.C to control where coverage applies:

• Item 3.A — listed states: the states whose statutory benefits Part One pays in full. These are states where the employer already had operations when the policy was written.
• Item 3.C — Other States Insurance (Part Three): lists states where the employer may expand later. If the employer begins work in a 3.C state during the term, Part One benefits apply there automatically.

Exam Key: A state that is in neither 3.A nor 3.C has no coverage. The dangerous gap is operations that begin in a state listed nowhere on the policy. Best practice is to list "all states except" the monopolistic and excluded ones in Item 3.C.

Monopolistic-State Exclusion

Part Three cannot be used to cover the four monopolistic states (North Dakota, Ohio, Washington, Wyoming). Coverage there must be bought from the state fund. The standard policy expressly excludes them from Other States Insurance.

USL&H — The Longshore and Harbor Workers Act

The U.S. Longshore and Harbor Workers' Compensation Act (USL&H) is a federal workers comp law for maritime workers on navigable waters who are not seamen — longshoremen, harbor workers, ship repairers, and shipbreakers working on or adjacent to the water.

The standard policy excludes USL&H obligations unless the USL&H Coverage Endorsement is attached. USL&H benefits are higher than most state acts, so the exposure must be specifically scheduled and rated.

The Jones Act and FELA

The Jones Act covers seamen — crew members of a vessel in navigation. Critically, the Jones Act is a fault-based negligence remedy, not a no-fault comp system: a seaman sues the employer for negligence. It is not covered by the standard policy and requires a separate maritime/Jones Act form.

The Federal Employers Liability Act (FELA) covers interstate railroad workers and, like the Jones Act, is fault-based — the worker must prove employer negligence (under a relaxed standard). FELA is excluded and is handled by separate railroad coverage.

Exam Trap: USL&H is no-fault (a true comp act). The Jones Act and FELA are negligence-based lawsuits. Don't confuse a maritime worker who is a longshoreman (USL&H, no-fault) with one who is a seaman/crew member (Jones Act, must prove fault).

Other Federal Acts to Recognize

• DBA (Defense Base Act) — extends USL&H benefits to civilian workers on overseas U.S. military bases and government contracts.
• FECA (Federal Employees' Compensation Act) — covers federal civilian employees, administered by the U.S. Department of Labor.
• Black Lung Benefits Act — covers coal miners with pneumoconiosis.

How Part Three Actually Works

Part Three (Other States Insurance) is not a duplicate of Part One — it is a bridge. When the employer begins operations in a 3.C state, Part Three has the policy respond as though that state had been listed in Item 3.A from the start. The insurer then must promptly add the new state to the policy. This protects an employer that, for example, sends a crew across a state line for a temporary project and would otherwise have a coverage gap on day one.

Exam Key: The fatal scenario is a state listed in neither 3.A nor 3.C. To eliminate the gap, agents commonly enter in Item 3.C the phrase "all states except" the monopolistic states and any state already shown in 3.A. A state cannot appear in both 3.A and 3.C.

Maritime Coverage — Drawing the Line at the Water's Edge

Maritime exposure is a favorite exam topic because the coverage depends entirely on who the worker is and where the work occurs:

The status and situs tests decide USL&H: the worker must have maritime status (loading, repairing, building vessels) and be injured on a maritime situs (piers, wharves, adjoining areas). A clerk in a shoreside office is not covered; a longshoreman on the dock is.

Exam Trap: Federal benefits under USL&H are typically higher than state benefits, so the exposure must be specifically rated. Never assume the standard state-act limits apply to a longshore claim.

Reciprocal and Extraterritorial Provisions

Most state acts include extraterritorial provisions covering a resident employee temporarily working in another state, and reciprocity agreements that prevent double coverage when two states could each claim jurisdiction. These provisions, combined with proper 3.C listing, are how multistate employers avoid both gaps and overlaps.

Fault vs. No-Fault — The Organizing Idea

The federal-acts material collapses into one organizing question: is the remedy no-fault or fault-based? No-fault systems (state acts, USL&H, DBA, FECA) pay benefits regardless of negligence and bar tort suits. Fault-based systems (the Jones Act for seamen and FELA for railroad workers) require the worker to prove employer negligence in court, but in exchange allow recovery of full tort damages, including pain and suffering, that a comp schedule would never pay.

Exam Trap: Because the Jones Act and FELA are negligence suits, they are liability exposures, not comp benefits — they are handled by maritime and railroad liability forms, never by Part One. A question that says a seaman or railroad worker must "prove the employer was negligent" is steering you away from the standard workers comp policy entirely.