If you use workers from staffing or leasing agencies to supplement your workforce, how adequately do your current insurance policies protect your company in the event that one of these individuals is injured on the job?
If you’re covered under an Insurance Services Office, Inc. (ISO) commercial general liability (CGL) policy and your workers’ compensation and employers liability policies are written on National Council on Compensation Insurance (NCCI) forms with no additional coverage endorsements, you may not be as protected as you think. You should consider adding the Coverage for Injury to Leased Workers (CG 04 24) endorsement to your CGL policy.
A potential gap in coverage arises from the way the CGL policy defines “temporary” and “leased” workers. A leased worker is a person leased to your company through an agreement with an employee-leasing firm to perform duties related to the operation of your business. A temporary worker is a person furnished to you to fill in for a permanent employee on leave or to meet seasonal or short-term workload conditions. Under the terms of the CGL policy, “employee” includes a leased worker, but does not include a temporary worker. The distinction is important, because the CGL policy’s Exclusion e: employers liability, excludes from coverage bodily injury claims made by an employee of the insured.
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Thus, if your CGL policy definitions consider the worker to be an “employee”-even though that worker is provided by a staffing agency-the policy will not cover any bodily injury claims by that worker. If the worker is not specifically substituting for a permanent employee who is on leave, or meeting a seasonal need or short-term workload conditions, the worker is not a “temporary worker” in the eyes of the insurer, and instead is considered your employee for purposes of Exclusion e. To be a “temporary worker,” that individual must have a specific end date to his or her employment with you. A temporary employee who is hired for an indefinite period of time simply does not meet the criteria stated above, and is therefore considered an employee, and subject to Exclusion e if they are injured on the job.
Adding the Coverage for Injury to Leased Workers (CG 04 24) endorsement to your CGL policy will help you fill this coverage gap. This endorsement states that the term “employee” does not include a “leased worker” or “temporary worker,” making the employers liability exclusion of the CGL policy inapplicable to the claims for injuries to a leased or temporary worker.
Another way to protect your company in lawsuits by injured temporary workers is to require the staffing agency that provides such workers to include the Alternate Employer Endorsement (WC 00 03 01 A) on its workers’ compensation and employers liability policy, and specifically schedule your company as the alternate employer. This endorsement will provide you with coverage as an alternate employer in the event the temporary worker files a tort suit.
Without the right coverage in place, on-the-job injuries to temporary workers can present a significant potential liability to your company. Examine your current CGL policy and arrangements with any staffing or leasing firms you use to make sure your company is protected.
BGES Group’s office, located in Larchmont, NY is a full service insurance agency offering, Property, Liability, Umbrella Liability, Business Auto, Bid & Performance Bonds, Inland Marine, Worker’s Compensation, Workers Compensation Premium Recovery, New York State Disability, Group Health, Life insurance, Personal lines and Identity Theft.
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BGES Group are Worker’s Compensation Specialists for the States of New York, New Jersey and Connecticut – Issues we address: 1) Lowering pricing – we have specialty programs that can save you up to 40%; 2) Finding a new company; 3) Replacing policies that are being cancelled or non renewed; 4) Audit disputes; 5) Company creating fictitious payroll at audit time; 6) Lowering high experience modifications factors; 7) Misclassification of payrolls; 8) Lowering or eliminating renewal deposits; 9) Getting coverage when you’ve been without for a few months; 10) Covering multiple states under one policy; 11) Eliminating 10% service or policy fees; 12) Timely issuance of certificates; 13) Always being able to get someone on the phone or by email when you need to.
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