With COVID19 interfering with work production and business profitability, having enough workers to keep your business going can be a tricky issue. Many companies are turning to temps or independent contractors to help fill their employee needs. But according to J.P. Perry Insurance, you better make sure your liability is covered when outsourcing workers.
Temporary Workers
If you are considering using temporary employees, you need to determine if they will be covered by some form of insurance. How a staffing agency classifies them (as a W2 employee or a 1099 worker) affects how they are or are not covered by workers' comp or general liability insurance. First, you have to check with the staffing agency. If they fall under the staffing agency's workers' comp, then you are safe. If not, then you need to determine if that worker will be covered under your own commercial general liability policy. In any case, if that worker is not covered under the staffing agency's worker's comp, or not under your workers' comp or commercial general liability, you could be at risk while they are working for you. Each policy is different, each business is different and each staffing contract is different. Your J.P. Perry agent can help you review your coverage and provide guidance to identify any liability gap that may exists.
Independent Contractors
If you are looking at using independent contractors, you need to understand that your general liability insurance usually does not protect your customers from independent contractors or subcontractors and doesn't cover accidents or other damage they may cause. Again, you need to know what your business coverage says about independent contractor liability before you bring a contactor on. You have basically two options to eliminate risks. One is to hire only qualified contractors who maintain their own general liability insurance coverage as a condition of service. Second, you may want to extend your basic liability insurance with an umbrella policy. This can provide an extra layer of protection. Another strategy you should consider is to talk with your J.P. Perry agent about the types of independent contractors you may hire in the future. This way your agent can recommend coverage you need going forward.