Do you ever have the need to lease workers from another employer or staffing agency?
Have you covered your butt – protecting yourself from being dragged into a Workers Compensation or Liability claim from this leased worker?
An “Alternate Employer Endorsement” can be added to the workers compensation policy of your staffing agency (or employer of the individual that’s now working for you). This will give you primary coverage on their workers compensation policy and will clarify the intent of your employee leasing situation.
Your business general liability policy excludes coverage for bodily injury to an employee and leased worker. Excluding employees is normally not a problem because of the Illinois statute barring employees from making a tort liability claim against you. However, this sole remedy statute does not apply to leased workers giving them the full right to bring action against you for any potential injury – leaving you exposed for losses.
General Liability policy definitions
· Employee: includes a “leased workers”. “Employee” does not include a “temporary worker”
· Leased Worker: means a person leased to you by a labor leasing firm, to perform duties related to the conduct of your business. Leased Worker does not include a “temporary worker”.
· Temporary Worker: means a person who is furnished to you to substitute for a permanent employee on leave or to meet seasonal or short-term workload conditions.
Solution: Endorse your General Liability policy with “Coverage for Injury to Leased Workers”. This endorsement simply states that the term “employee” does not include a “leased worker” or “temporary worker”. Thus affording coverage once again to the “leased worker”.
When you use a workforce that is furnished on a short-term basis, such as from a temporary staffing agency, or on a longer-term basis, such as from an employee leasing company, careful review of the details of the arrangement are necessary. You need a solid understanding of the difference between the CGL definition of "temporary worker" and "leased worker," and the implications of each. You must obtain the proper documentation from the company providing the personnel, including documentation that the leasing/staffing company has the alternate employer endorsement, scheduling your business on their policy. You should also consider the possibility of adding the coverage for injury to leased worker endorsement to your own CGL policy.