When a staffing agency or a labor leasing firm fills out your paving crew, an injured worker’s claim usually starts with the staffing firm’s workers compensation policy, not yours, but state law can pull your company in as well. Your general liability form also sorts temporary and leased workers differently, so the arrangement you actually have changes the answer.
A temp from a staffing agency and a leased worker are different arrangements
The standard ISO general liability form, in the edition we read and as commonly written (the Commercial General Liability Coverage Form, CG 00 01 04 13), defines a leased worker as “a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business”. A temporary worker is, in the form’s words, “a person who is furnished to you to substitute for a permanent” employee on leave, or someone furnished to meet seasonal or short-term workload conditions. The form then keeps them apart: “‘Leased worker’ does not include a ‘temporary worker’.”
For a paving company, the temporary case is the familiar one: extra rakers, flaggers and laborers added for the busy stretch of the season. Oregon’s Workers’ Compensation Division describes a seasonal workload in similar terms: “This is not necessarily a season of the year, but a temporary increase in demand upon an employer’s normal workload that requires more help to meet the demand.”
What the parties call the arrangement does not settle it. Oregon’s guidance on worker leasing and temporary staffing says “Oregon considers all staffing arrangements to be leasing, unless the staffing company can provide written documentation or other evidence that each worker is provided on a temporary basis.” That is Oregon’s rule for Oregon work; the state view sits on our Oregon page.
The staffing firm’s policy is where a temp’s injury goes first
In most arrangements, a temporary laborer hurt on your job is paid benefits under the staffing firm’s workers compensation policy. Indiana’s workers compensation rating bureau, in its reference page on the alternate employer endorsement, puts it simply: “Workers employed through the temporary employment agency are covered under the workers’ compensation policy that the agency has purchased.”
That does not let you drop your own policy. Oregon is direct about it: “A client using employees placed by a temporary staffing agency must have its own workers’ compensation insurance policy or be self-insured to cover its regular workforce.” The staffing firm’s policy will not stretch to your people: “Policies for temporary staffing companies are underwritten to cover only the staffing companies’ workers.”
Leasing changes part of that picture. In Oregon, “In a worker leasing arrangement, the leasing company’s policy must cover both the provided workers and any non-leased workers the client may have, unless the client has its own coverage.” And “If the client carries the coverage, the client’s insurance must cover all of the employees, leased and non-leased.” With leasing, the question is whose policy covers your whole crew. How your own policy is built is on our workers compensation page.
When the company directing the work answers too
State law can make your company answerable alongside the staffing firm. Minnesota’s information sheet on temporary and leased employment calls the agency the general employer and the business directing the work the special employer, and says “Because both are employers, they are jointly responsible for workers’ compensation insurance coverage for the employee.”
The two can agree which of them buys the policy, often the agency, but the agreement protects you only if it is kept: “However, both employers are liable for the coverage and if the one that agrees to obtain the coverage does not purchase a policy, the remaining employer and its insurer, if insured, will be held liable for the benefits in workers’ compensation administrative proceedings.” With no contract and both employers insured, Minnesota looks first to the special employer’s insurer, which controls the premises and the worker. That is Minnesota’s law, and our Minnesota page carries the state view.
Washington’s Department of Labor & Industries states the premium duty on its temporary staffing page: “The temporary staffing company pays the required workers’ compensation premiums for these employees.” Then: “However, if they fail to do so, the client customer is responsible for the unpaid premium.” The state view is on our Washington page.
State law, your contract with the staffing firm and each policy’s wording decide who counts as an employer and who owes what. Read this as general information, which is how Minnesota frames its own sheet: “This document contains general information. It is not legal advice.”
The alternate employer endorsement goes on the staffing firm’s policy
The document to ask the staffing firm for is an endorsement on its own workers compensation policy that names your company as the alternate employer. The standard NCCI form, as commonly written, is the Alternate Employer Endorsement, WC 00 03 01 A (Ed. 2-89), the edition we read. You do not buy it: the staffing firm’s insurer issues it, and the staffing firm is the named insured.
From the staffing firm’s side, the form says “This endorsement applies only with respect to bodily injury to your employees while in the course of special or temporary employment by the alternate employer”, in the state its Schedule names. Its central sentence follows: “Part One (Workers Compensation Insurance) and Part Two (Employers Liability Insurance) will apply as though the alternate employer is insured.” So if a borrowed laborer’s injury becomes a claim against you as special employer, the staffing firm’s coverage answers for you. The form adds, “We will not ask any other insurer of the alternate employer to share with us a loss covered by this endorsement.”
A state rating bureau’s instruction sheet for the form describes the typical use: a supplier of temporary help asked by its customer “to provide this insurance to protect the customer from claims brought by the insured’s employees against the alternate employer”. The premium sits on the staffing firm’s policy, not yours.
What the endorsement leaves on your side
The endorsement stands in front of your own coverage; it does not replace it: “The insurance afforded by this endorsement is not intended to satisfy the alternate employer’s duty to secure its obligations under the workers compensation law.” It also says “We will not file evidence of this insurance on behalf of the alternate employer with any government agency.”
It can end without you hearing about it: “The policy may be canceled according to its terms without sending notice to the alternate employer.” A spring certificate shows the policy as it stood that day.
Then read the Schedule. It names the alternate employer, the state of special or temporary employment, and sometimes a contract or project. If that last line is filled in, the endorsement reaches only the staffing firm’s work under that contract or at that project. A firm that supplies many customers may use blanket wording in place of your name, which the instruction sheet allows. If your crew crosses a state line or moves between jobs, check that the Schedule reaches the state and the work you are actually doing.
In a state where workers compensation is written only through a state fund, a private endorsement of this kind is not how the arrangement works, and that state’s page is the place to start.
How your general liability form sorts a leased worker and a temp
Your general liability form counts a leased worker as your employee and a temporary worker as not, in its definitions section. It says “‘Employee’ includes a ‘leased worker’.” and, a line later, “‘Employee’ does not include a ‘temporary worker’.”
That matters because of exclusion 2.e, the employer’s liability exclusion. It removes bodily injury to an employee of the insured arising out of employment or out of “Performing duties related to the conduct of the insured’s business”, and resulting family members’ claims. A leased worker’s injury on your job therefore falls inside the exclusion and belongs to workers compensation and employers liability, whichever policy covers that worker. A temporary worker’s injury is outside exclusion 2.e. A suit a temp brings against your company, where state law allows one, can therefore be a general liability matter, subject to the policy’s other terms.
Exclusion 2.d still applies to everyone: the policy does not take on any obligation you have under a workers compensation or similar law. The employer’s liability exclusion also has a carve-back for liability you assumed by contract, read in indemnity clauses and the insured contract.
Our general liability page sends your own crew’s injuries to workers compensation; the form simply counts a temp outside that crew and a leased worker inside it. Endorsements can change these definitions, and your forms schedule controls.
Whether a borrowed hand counts as an insured on your policy
The same definitions decide who is protected when a borrowed worker injures someone else. Section II lists your employees as insureds, “but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business”. A leased worker is an employee under the form, so a leased roller operator who cracks a customer’s curb is, on that reading, an insured for that act. The form does not list a temporary worker there, because a temp is neither an employee nor a volunteer worker under its definitions.
The employee grant carries its own limit: employees are not insureds for bodily injury “to a co-“employee” while in the course of his or her employment or performing duties related to the conduct of your business”. That is a reading of the standard form, not a ruling on any claim; the policy you hold decides it.
Safety on the job is a duty you share with the agency
OSHA and NIOSH, in their joint recommended practices for protecting temporary workers, treat the agency and the host as joint employers: “The staffing agency and the staffing agency’s client (the host employer) are joint employers of temporary workers and, therefore, both are responsible for providing and maintaining a safe work environment for those workers.” Their definition of a temporary worker, workers “supplied to a host employer and paid by a staffing agency, whether or not the job is actually temporary”, is broader than the general liability form’s; do not merge the two.
For a paving crew, the practical point is site training. “At least one of the joint employers, generally the host employer, must provide worksite-specific training and protective equipment to temporary workers, and identify and communicate worksite-specific hazards.” A laborer new to a paver screed, a hot mix truck or live traffic needs that before the first shift, and “The training must be in a language the workers understand.”
In Massachusetts, the Attorney General’s page on temporary workers says “Temporary and staffing agencies must give their workers certain important information in writing before each new assignment”, including “the name, address, and phone number of the agency’s workers’ compensation insurance carrier”. That is Massachusetts law, with the state view on our Massachusetts page.
What to ask the staffing firm for before the busy season
Ask for these before the first borrowed laborer arrives:
- The arrangement, in writing. Temporary staffing or leasing.
- The endorsement, not only a certificate. Its Schedule should name your company or use blanket wording, show the state you are working in, and show your job if a project is listed.
- The contract terms. Who secures the workers compensation coverage, who supplies protective equipment and training, and any indemnity between you.
- Your own policies. Your workers compensation stays in force, and your general liability forms schedule is read for endorsements that change the employee definitions.
- A date to ask again. Recheck when the staffing contract renews and when the season restarts.
Real-World Scenario: A paving contractor brings in laborers from a staffing agency for a busy run of mill-and-overlay jobs. The agency sent a certificate and an alternate employer endorsement the previous spring; nobody asked again. Midseason, a temp raker is burned by hot mix on a job across the state line. The Schedule on file names only the contractor’s home state and an old project, and the agency’s policy has since been rewritten with another insurer. Whose policy answers now turns on the new endorsement and the law of the state where the burn happened, sorted out after the injury instead of before the job.
Claims about which seasonal hires you call back belong to employment practices liability, and whether you, the owner, are on your own policy is covered in workers comp options for the owner of a paving company. Both sit in one paving contractor insurance program.
Send us the staffing or leasing agreement, the firm’s certificate and its endorsement Schedule, and request a quote; we check them against your own policies before borrowed labor reaches a job.