13.4 Other States, USL&H, and Federal Acts

Other States, USL&H, and Federal Acts

Workers compensation is state-specific, but workers cross state lines and some occupations fall under federal law. The policy and several endorsements knit these exposures together. The exam tests three areas: the Information Page items, Part Three Other States Insurance, and the federal acts (USL&H, Jones Act, FELA, FECA, Defense Base Act).

The Information Page items (3.A vs. 3.C)

The Information Page (declarations) controls which states the policy covers:

• Item 3.A — Workers Compensation Insurance. Lists the states where the insurer pays statutory benefits as primary, fully covered states.
• Item 3.B — Employers Liability. Shows the Part Two limits.
• Item 3.C — Other States Insurance. Lists states where coverage may apply if operations begin there during the term.
• Item 4 shows the classifications, rates, and estimated premium.

Part Three — Other States Insurance

Part Three protects an employer whose workers incidentally travel to a state not listed in Item 3.A. If a state is named in Item 3.C, and the employer begins work there during the policy period, Part Three provides coverage as if that state were listed in 3.A. Critical limitation: Part Three does NOT cover a state where the employer already had operations on the effective date but failed to list it in 3.A, and it does not apply in monopolistic states.

Monopolistic states

A few jurisdictions sell workers compensation only through a state fund — employers cannot buy Part One from a private insurer. These monopolistic states are commonly remembered as North Dakota, Ohio, Washington, and Wyoming (plus certain territories such as Puerto Rico and the U.S. Virgin Islands).

Because no private statutory coverage is available there, Other States Insurance cannot extend Part One into a monopolistic state. Employers operating in those states buy statutory coverage from the state fund and then add a Stop Gap endorsement (or a CGL endorsement) to fill the employers liability (Part Two) gap the fund does not provide.

The federal acts at a glance

Distinguishing the maritime acts (a heavy exam focus)

The USL&H Act is a no-fault federal comp system for maritime workers who are not seamen — think dockworkers loading/unloading cargo or repairing vessels on adjoining land. Coverage is added to the policy by the USL&H Coverage Endorsement, which amends Part One to include USL&H benefits.

The Jones Act applies to seamen — crew members who contribute to the function of a vessel in navigation. Unlike no-fault comp, the Jones Act lets an injured seaman sue the employer for negligence (a fault-based tort remedy). Because a Jones Act claim is a liability action, it is handled through a Maritime Coverage Endorsement to Part Two, not Part One.

Trap pairings to memorize:

• USL&H = harbor/dock workers, no-fault benefits, Part One endorsement.
• Jones Act = seamen, negligence suit, Part Two endorsement.
• FELA = railroad workers, negligence-based, federal.
• USL&H and the Jones Act are mutually exclusive — a true seaman is covered by the Jones Act, not USL&H. The two fill complementary gaps so a maritime worker is not left uncovered.

Extensions of the USL&H Act

Congress extended USL&H principles to specific groups through companion statutes the exam may reference. The Defense Base Act applies USL&H benefits to civilian contractors working on U.S. military bases or public-works projects overseas. The Outer Continental Shelf Lands Act extends coverage to workers on offshore oil and gas platforms. The Nonappropriated Fund Instrumentalities Act covers civilian employees of military exchanges and morale/recreation operations. Each builds on the USL&H no-fault framework rather than creating a new benefit scheme.

Putting the acts in order

A quick decision path helps on test day. Ask first where the worker is and what they do. A crew member of a vessel in navigation → Jones Act (negligence). A maritime worker on the dock/pier who is not crew → USL&H (no-fault). An interstate railroad employee → FELA (negligence). A federal civilian → FECA. A civilian contractor on an overseas base → Defense Base Act. Everyone else → the applicable state act, with Other States Insurance smoothing incidental multi-state travel and Stop Gap filling the employers liability hole in monopolistic states.

Extraterritorial provisions and reciprocity

When a worker employed in one state is injured in another, extraterritorial statutes and reciprocity agreements determine which state's act governs. Many states cover their resident employees temporarily working elsewhere and recognize coverage written in the home state, avoiding duplicate claims.

The Information Page must still list every state of regular operations in Item 3.A; relying on Other States Insurance for a state where the employer has ongoing operations is a common error that leaves a gap, because Part Three responds only to states where operations begin during the term and that are named in Item 3.C. Properly endorsing the policy as operations expand — rather than after a loss — is the practical takeaway, and the reason producers review the Information Page at each renewal against the insured's actual footprint.