Temp Service Agency Risk & Insurance Issues – Part 1 of 2

Temp Service Agency Risk & Insurance Issues – Part 1 of 2

To prevent one minute from normal from arriving next time your organization hires a temporary worker, please contact your KMRD Partners relationship manager to review these and other risk and insurance considerations:

  1. General Liability – Your General Liability will apply if a temporary employee sues your company.  Loss experience can be protected by obtaining an Indemnification/Hold Harmless Agreement, and Additional Insured status on the temp agency’s Insurance Policies.
  2. Workers Compensation Insurance – At a minimum, the temp agency service provider should be required to purchase Worker’s Compensation insurance on the employees it supplies to your company.  In addition, the policy should include:
    1. Waiver of Subrogation – The temp agency’s Worker’s Compensation carrier should waive its rights of subrogation against your organization in the event it pays a loss which, it might be argued, is your organization’s fault.
    2. Alternate Employer Endorsement – Require the temp agency to add your organization as an “Alternate Employer” on its Workers Compensation Policy. This helps to clarify the employee is to be covered by the Temp Agency’s Workers’ Compensation Insurance Program, while also helping to protect your organization as the “workers compensation insurance sole remedy rule” as an “Alternate Employer”.
  3. Third Party Bodily Injury, Property Damage & Personal Injury – Your organization’s Commercial General Liability and Auto Liability Insurance Program will apply to claims made against it.  However, since “Temporary Employees” do not fall within the definition of “Employees,” the General Liability and Auto Liability Policies will not cover the employee himself/herself.  A well-written contract should clarify where this coverage will come from.

The key to the success of a contractual risk transfer strategy is to make sure there is an insurance program behind it to protect your interests.  Your KMRD Partners relationship manager will review your coverage to make sure your interests are being protected.

At KMRD Partners, we realize expertise in assessing and transferring risk through proper insurance coverage is only part of what it takes to properly service our insureds. We also support them with experienced, knowledgeable claims management professionals who act as their advocates following one minute from normal.

KMRD reduces the overall cost of risk for clients by producing a greater value for each insurance dollar spent, while utilizing an enterprise risk management approach to engineer the optimal solution. The firm’s diagnostic process is supported by its unique collaborative technology, KMRD XCHANGE ®

We are dedicated to anticipating risk and helping firms recover from unplanned events that wait on the other side of one minute from normal.

To review your organization’s insurance coverage please contact your KMRD Partners relationship manager or e-mail us at contactus@kmrdpartners.com before one minute from normal strikes.


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