We have a manufacturing client that uses a temporary staffing agency for some of their employment needs. In this particular situation, the worker was provided by the staffing agency for a temporary to permanent position. The contract requires the staffing agency to have the Alternate Employer Endorsement and list our client as an Alternate Employer. This worker was injured and collected WC from the staffing agency and then filed an action against our client. The CGL carrier has denied the claim citing the WC/Employer's liability exclusion in the CGL and stating that the injured party is an employee as defined by "leased worker". They advised that this injured party doesn't fit the definition of a "temporary worker", which is defined as a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short-term workload conditions. Since this injured party was furnished for a temporary to permanent position, they didn't exactly fit into this definition. Ultimately, the Alternate Employer endorsement should protect our client, but this coverage gap exists if that endorsement isn't procured. Any suggestions on arguments for coverage under the CGL? This is a very common scenario for many employers.
Pennsylvania Subscriber
The CGL defines temporary and leased workers as follows:
19. "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.
10. "Leased worker" means 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. "Leased worker" does not include a "temporary worker".
Since the intent of the insured was to keep the employee long term, it's closer to a leased employee than a temporary employee. The intent is to keep the employee long term, and not just until the season is over or an employee on leave returns.
However, since you're dealing with the status of a worker, workers compensation regulations probably come into play; how the state defines a temporary or leased worker may be a factor in your situation. Strictly adhering to policy language we believe the employee is a leased worker; you should take a look at state workers comp regs to see what the state dictates. Also, the contract between the agency and the manufacturing company may add some clarification.