Executive Vice President
As a business owner, you know that hiring temporary or leased employees through an external agency can save you the hassle of finding, hiring and training new staff throughout the year. What many employers don't realize, however, is that hiring temporary staffing carries certain risks.
First, it's important to recognize the distincition between two classifications of employees: temporary and leased.
- A temporary employee is someone who comes to your workplace from an employment agency and provides services for a specific project on a short-term basis.
- A leased employee works at your location for a significant period of time, and there is no clear distinction between this person and your regular employees.
This distinction matters if one of your employees — leased or temporary — is injured on the job and sues you, the employer, for negligence in failing to train, supervise or provide a safe work environment.
The common expectation is that any injured person will be covered under the employment agency's workers' compensation policy. But this is where the distinction between temporary and leased employees comes into play.
If a temporary employee sues you, there is coverage under your Commercial General Liability (CGL) policy. If you were found to be negligent, the policy would pay on your behalf.
If the injured employee is a leased employee, however, there is no coverage provided for you under the policy. And if that's the case, you could be exposed to an uncovered claim and major financial loss.
If your business utilizes a staffing agency that provides a workforce on a short- or long-term basis, carefully review the details of the arrangement. If an agency's employee is injured at your business and sues you, make sure you understand the difference between temporary and leased employees, and know the implications of each classification. Finally, we recommend that you require the staffing company to add the Alternate Employer Endorsement to its workers' compensation policy. This endorsement will resolve the issue of your company being left exposed.
If you have other questions regarding commercial liability insurance, contact a knowledgeable agent. The team at Sylvia Group would be happy to help.
About John Beauregard and Sylvia Group
During more than three decades as a business insurance professional in Massachusetts and Rhode Island, Sylvia Group Executive Vice President John Beauregard has built relationships with clients by recognizing and addressing their unique risks and needs, providing them with the best available coverage and delivering dedicated, dependable customer service, particularly in the medical manufacturing, municipal, education and transportation insurance markets. A Certified Insurance Counselor (CIC) and Licensed Insurance Adviser (LIA), John works with clients to help them secure what they've invested in and built, evaluating the risks they face, developing customized policies to protect against those risks and creating comprehensive risk-management programs designed to save them money by reducing premiums.
Sylvia Group helps businesses and individuals protect their future by designing insurance, employee benefits and financial planning programs. We’re a locally owned agency known for our commitment to our clients and our community, as well for our industry expertise. Founded in New Bedford, MA, in 1950, headquartered in neighboring Dartmouth, and serving businesses and individuals throughout Massachusetts, Rhode Island and beyond, Sylvia Group is certified as a Woman Owned Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence.