Alternate Employer Endorsement for Workers Compensation

Using temporary labor services has become very avant-garde nowadays across all types of industries. While it can solve some of your expansion and contraction issues concerning hiring and terminating employees, it does create potential liability hazards contractually. As always, with all contracts, whether they are insurance, employment, or corporate, they need to have the review and input from your legal team.

Most of the labor contracts that we have seen from our clients have been extremely lacking in clarity and comprehensiveness of explanation as to who was responsible and accountable for what. If it is not spelled out correctly and clearly, your small business could be on the hook for state and federal fines and claims due to improper reporting and/or OSHA safety issues. As far as workers compensation insurance goes, it is imperative that you have the temporary labor firm endorse onto its Worker’s Compensation policy an alternative employer endorsement in favor of your organization.

By having your firm endorsed upon the temporary labor firms Worker’s Compensation policy you will be provided all of the protections and benefits from having a policy in force with your name on it. That means you will have coverage as an employer as well as you will have legal defense that will be supplied under the policy, which is usually an unlimited amount of legal limits in protection.

The risk management tip of the day if you are a small business owner who is using temporary labor firms to make sure that you require them to endorse policy to include “alternate employer coverage” on their Worker’s Compensation policy in favor of your company.

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