When companies use temporary employment agencies, an alternate employer endorsement frequently comes into play. Sometimes, businesses experience staffing shortages and turn to these companies’ services to cover the gaps. The workers’ compensation policy that the agency has purchased provides coverage for employees hired by the temporary employment agency.
When an external company hires an employee, the hiring company will look for an endorsement from a different employer to shield it from potential lawsuits brought by the temporary worker. We will define alternative employer endorsement and describe its process.
An Alternative Employer Endorsement: What Is It?
A secondary employer endorsement adds additional businesses that the primary insured may do business with to the current workers’ compensation coverage. Within the policy’s endorsement schedule, an alternate employer endorsement enumerates additional businesses that will be covered by the policy.
To avoid workers’ compensation lawsuits, businesses frequently use subcontractor vendors or temporary employment agencies to hire contracted workers.
The Operation of Alternate Employer Endorsements:
Companies that experience a staffing shortage may turn to temporary employment agencies for assistance. The workers’ compensation policy that the temp agency has purchased provides coverage for workers hired through it. When the client who needs the employee’s services hires the employee for a job elsewhere, they will look for another employer’s endorsement.
This kind of workers’ compensation plan will protect the hiring company from legal action stemming from any harm or impairment the temporary worker may sustain while performing their duties.
An Illustration of a Different Employer Endorsement
A delivery company’s management hires a temporary employee through an employment agency because they anticipate higher volumes over the holidays. The delivery company requests that the agency insure it as an alternate employer under the agency’s workers’ compensation policy to shield itself from lawsuits.
The temporary worker needs medical attention after dropping a package on their foot a few weeks into the job. The delivery company promptly submits all necessary incident reports and documentation and complies fully with the claims investigation. The worker will not be eligible to claim under the delivery company’s insurance policy as they will be covered by the agency’s workers’ compensation policy.
Adherence Timetable:
The endorsement schedule for an alternate employer covers injuries that employees receive while working for that employer temporarily or on a special assignment. The state in which the temporary employees are employed must be stated in the schedule. The client is only insured during the temporary worker’s assignment, with the temporary employment agency as the primary employer, and coverage is limited to project duration or contract.
Alternative Responsibilities of the Employer in the Claims Procedure
Adding an alternative employer to the endorsement schedule of a policy usually means that the additional employer has to cooperate with any claims investigations. This usually entails reporting any injuries a temporary worker may sustain or seeing to it that the worker receives the appropriate medical attention after an injury.
They also have to give the policyholder access to any records about the injury. The insurance company is not obligated to inform the other employer if the temporary employment agency cancels the policy.
In Texas, what is the alternative employer endorsement?
The alternate employer endorsement is an endorsement where the policyholder, or named insured, agrees to provide employers’ liability and workers’ compensation coverage for claims against special or temporary employers.
Questions and Answers:
What does the name of an alternative employer mean?
Within the policy’s endorsement schedule, an alternate employer endorsement enumerates additional businesses that will be covered by the policy. To avoid workers’ compensation lawsuits, businesses frequently use subcontractor vendors or temporary employment agencies to hire contracted workers.
In Louisiana, what is an alternative employer endorsement?
An endorsement to a workers’ compensation policy known as an “alternate employer endorsement” adds primary employers’ liability and workers’ compensation coverage to an organization designated as an alternate employer, treating it as an insured under the policy.
What is Wisconsin’s alternative employer endorsement?
The Alternate Employer Endorsement provides Workers’ Compensation and Employers’ Liability coverages to the alternative employer. Benefits are due to temporary workers who get work-related injuries while working for the hiring company or another employer. The workers’ principal employer is still the temp agency.
Which five endorsements apply in Texas?
There are five endorsement areas available to students.
- Studies across multiple disciplines (one of the following)
- Humanities and Arts (any of the following)
- Public Service—(pick one of the options below)
- STEM fields include mathematics, science, technology, and engineering.
- Business and Industry (any of the areas listed below, or a mix of them)
