1. Forms
2. WC
3. WC-00-01-08

What the form is

The WC 00 01 08 A, Nonappropriated Fund Instrumentalities Act Coverage Endorsement, is an endorsement to the standard Workers' Compensation and Employers Liability Insurance Policy. Its primary purpose is to extend coverage to civilian employees working for nonappropriated fund instrumentalities (NAFIs) of the United States Armed Forces. The Nonappropriated Fund Instrumentalities Act (NFIA) mandates that these employees are covered under the provisions of the Longshore and Harbor Workers' Compensation Act (LHWCA). This endorsement ensures that the policy complies with these federal requirements, providing statutory workers' compensation benefits and employers' liability coverage for such employees. It also removes the specific exclusion related to Nonappropriated Fund Instrumentalities that might otherwise be present in the policy's employers' liability section.

Classes of business it applies to

This endorsement is specifically designed for employers who have civilian employees working in nonappropriated fund instrumentalities. These are entities that are not funded by congressional appropriations but rather generate their own revenue through services and sales to military personnel and their families. Real-world examples include:

• Employees of post exchanges (PXs) or base exchanges (BXs)
• Staff at officers' or enlisted clubs
• Workers in military morale, welfare, and recreation (MWR) facilities such as gyms, golf courses, bowling alleys, and recreational lodging
• Personnel at commissaries or service stores on military installations

Any business operating as a NAFI and employing civilians would require this endorsement to ensure proper workers' compensation coverage.

Special considerations

It is crucial to use this endorsement when an insured employs individuals covered by the NFIA, as standard state workers' compensation benefits may not apply or may be insufficient. The NFIA effectively federalizes the workers' compensation coverage for these employees, bringing them under the LHWCA's benefit structure, which can differ significantly from state-specific benefits in terms of amount and duration. Failure to attach this endorsement could result in a significant coverage gap and non-compliance with federal law. The endorsement should clearly list the locations and operations subject to the NFIA.

Key information for agents and underwriters

For Agents:

• It is essential to thoroughly identify if a client operates any nonappropriated fund instrumentalities or employs individuals who might fall under the NFIA. This is particularly relevant for businesses that contract with or operate on military bases.
• Explain to the insured the necessity of this endorsement to cover these specific federal exposures and avoid potential uninsured claims.
• Ensure the schedule on the endorsement accurately describes the work and locations covered under the NFIA.

For Underwriters:

• Recognize that this endorsement brings LHWCA-level benefits into play, which can be more generous than standard state act benefits. This may impact pricing and requires careful risk assessment.
• Verify that the operations described indeed fall under the NFIA.
• Consider the specific hazards associated with the work being performed by these civilian employees on military installations.
• Ensure that the premium accurately reflects the increased exposure due to federal act coverage.