In today’s gig economy, there are numerous forms of employment which can bring challenges to your workers compensation insurance, and worker injury risk. The Alternate Employer Endorsement is an important risk transfer tool which should be deployed when non-traditional employment arrangements are engaged in. Here’s why.
If you are an employer who employs workers from a temp firm, leasing firm, or a similar employment/ staffing arrangement you should be asking the staffing firm to name you on their workers compensation policy through the Alternate Employer Endorsement. What this endorsement does is extend primary coverage to the employees of the leasing firm while they are in your temporary or special employment. In its most basic sense it affirms that temporary or leased workers are employed at your workplace but are not your employees for the purposes of workers compensation. Rather, they covered for workers compensation by the staffing/leasing firm.
In the Alternate Employer Endorsement your company is specifically named with your workplace address in the schedule. If you deploy workers from a staffing firm at multiple locations then you should indicate all work locations on the schedule or have the Alternate Employer Endorsement replicated for each location, depending on the staffing firm’s insurer’s preference.
The Alternate Employer Endorsement is not the same as being named as an additional insured. In fact, in most states and with most insurers cannot provide additional insured status on a workers’ comp policy.
One area of co-employment and this endorsement which needs special emphasis is Part Four of the workers compensation policy regarding reporting of injuries. The Alternate Employer Endorsement says that the duties of reporting a worker injury claim apply to the employer and the alternate employer. For clarity sake there should be a process in place where the “worksite employer” reports any worker injury to the staffing firm / employer of record so they can appropriately file a claim with their workers compensation insurer as well as with the state workers comp board. The worksite employer still has a duty to provide immediate medical attention to the injured worker, perform investigations, and properly document their files, but reporting claims should be responsibility of the staffing firm.
Lastly, it’s important to have legal counsel review any contracts relative to using a staffing firm to make sure there is sufficient risk transfer and documentation in place. You’ll want the staffing firm to hold you harmless from claims which may arise to the fullest extent of the law.
Have questions or issues on workers compensation that you’d like to talk about? Why not drop me an email or give me a call. Thanks!