10.5 Other States and USL&H Coverage

Where the Policy Applies: Item 3.A vs. 3.C

The Information Page of the standard WC policy controls geography:

Other States Coverage matters when an employee travels or temporarily works outside the home state. If Item 3.C lists "all states except those in 3.A and the monopolistic states," the policy automatically covers a new state when work begins there — paying benefits under that state's law. A state not listed in 3.A or 3.C, and where the employer was operating at inception, is uninsured.

The Monopolistic Limitation (Exam-Testable)

Other States Coverage cannot extend to Ohio, North Dakota, Washington, or Wyoming. To cover a worker there, the employer must:

1. Buy a separate policy directly from the state fund (private WC is prohibited)
2. Add stop gap employers liability to its CGL
3. It may not rely on the Item 3.C endorsement

The Four Monopolistic Funds

Puerto Rico and the U.S. Virgin Islands operate similarly. State funds provide Coverage A only, never employers liability — hence the stop-gap requirement covered in 10.3.

Federal Workers' Compensation Programs

Four federal acts override state comp for specific occupations. Two are no-fault; two are negligence suits.

USL&H Act (Longshore and Harbor Workers' Compensation Act, 1927)

• Covers: longshore workers, harbor workers, ship builders/repairers/breakers, and workers on or adjoining navigable U.S. waters (piers, wharves, dry docks, terminals)
• Excludes: seamen and crew (Jones Act), and small-vessel/clerical/recreational workers under stated exemptions
• Benefits: no-fault, similar structure to state comp including wage replacement
• How it attaches: by the Longshore and Harbor Workers' Compensation Act Coverage Endorsement (WC 00 01 06) added to the WC policy
• Dual jurisdiction: in some coastal states a worker can claim under both USL&H and state comp

Jones Act (Merchant Marine Act, 1920)

• Covers: seamen — a master or member of the crew of a vessel
• Negligence-based: the seaman must prove the employer's negligence (or vessel unseaworthiness), but may then recover pain and suffering
• Mutually exclusive with USL&H: "master or member of the crew of any vessel" → Jones Act, never USL&H. A worker fits one or the other, not both

FELA (Federal Employers Liability Act)

• Covers: interstate railroad workers
• Negligence-based, not no-fault; the worker must prove the railroad's negligence and may recover pain and suffering — awards can far exceed scheduled comp benefits

FECA (Federal Employees' Compensation Act)

• Covers: civilian federal government employees
• No-fault, administered by the U.S. Department of Labor

Decision Map for the Exam

Work through worker type first, then geography:

1. Railroad worker? → FELA (prove negligence)
2. Seaman / crew? → Jones Act (prove negligence)
3. Longshore / harbor / ship repair? → USL&H (no-fault, WC 00 01 06)
4. Federal civilian? → FECA
5. Otherwise a state worker traveling out of state? → Other States Coverage if the state is in Item 3.C and not monopolistic; if monopolistic, buy from the state fund plus stop gap.

Reading the Information Page Items

The whole geography question turns on three numbered items on the WC Information Page. Knowing each cold prevents most location traps:

Exam Key: A state must appear in 3.A or 3.C for the policy to respond there. If an employer was already operating in a state at inception but it is in neither, that exposure is uninsured — the very gap Item 3.C is designed to close for future expansion.

Why Other States Coverage Matters

Without Item 3.C, an employer that opens a new branch in a previously unlisted state would have no coverage there until it amended the policy — a dangerous gap if a worker is hurt the first day. Other States Insurance closes that timing gap: the moment operations begin in a 3.C state, full statutory coverage springs up under that state's law. The carrier then picks up the new exposure at audit. This is purely a convenience for non-monopolistic states; the four state-fund jurisdictions can never be added this way.

USL&H Twenty-Percent Maximum and Dual Jurisdiction

USL&H benefits are tied to the national average weekly wage, with a statutory maximum, and are administered by the U.S. Department of Labor's Office of Workers' Compensation Programs. In dual-jurisdiction coastal states, a single waterfront injury can support a claim under both the federal USL&H Act and the state comp act; the worker generally cannot double-recover, but may choose the more favorable forum. The Outer Continental Shelf Lands Act (OCSLA) extends USL&H to workers on fixed offshore drilling platforms — a detail worth recognizing if it appears.

Federal Acts at a Glance

Exam Key: The two negligence acts (Jones Act, FELA) are the only ones that allow pain-and-suffering recovery; the two no-fault acts (USL&H, FECA) pay a benefit schedule like state comp.