Subscribe by Email

Your email:

Trades Hub

Alltop, confirmation that we kick ass

Browse by Tag

Construction Risk Blog

Current Articles | RSS Feed RSS Feed

Differentiating Between Leased or Temporary Workers


There are a few coverage issues for contractors to contemplate when leasing an employee or hiring a temporary employee:


Leased worker means a person leased to you by a labor leasing firm under an agreement to perform duties related to your business.


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.

 Each line of insurance treats these types of workers differently:

General Liability definition of “Employee” includes a “leased worker” but excludes a “temporary worker”.  Under the GL an employee/leased worker cannot sue or collect for bodily injury; Workers' Compensation is the primary source of any bodily injury to the employee/leased worker.  Whereas, the temporary worker does not fall under the employee exclusion.  The “temporary worker” could sue their temporary employer for bodily injury under the General Liability and collect pain and suffering.


Automobile Liability similar to General Liability, the auto does not define a Temporary worker as an employee.  Here is an example:  In the course of  unloading an ABC Construction truck, a passerby is injured and brings suit against EEC and the individual that caused the injury (temp worker).  ABC Construction would, of course, have coverage under the automobile policy, and if the person causing the injury is an employee or leased worked, he or she would also be protected.  Your automobile liability will not defend the temporary worker in this situation.


Workers' Compensation If you use an employment agency or leasing company we need to review their contract.  Most will state they are responsible for Workers Comp.  We need to be sure they have endorsement WC 00 03 01 Alternate Employer Endorsement on the policy.  This endorsement extends the Leasing Company’s Workers' Compensation coverage and employers’ liability coverage to ABC Construction.  It is used to extend primary coverage to employees of the leasing company when they are leased to another company.

The temporary worker poses a coverage exposure for contractor utilizing the added manpower; one solution would be to have a subcontract agreement in place along with the necessary insurance requirements (additional insured endorsement and waiver of subrogation on all insurance).

* All discussions in this post are hypothetical, and laws vary state by state.  Please consult legal council and review your current insurance program prior to drafting any contracts and becoming involved in any temporary or leased employee scenario.

All Posts