While staffing companies provide a valuable service, organizations expose themselves to a number of risks when utilizing contingent labor provided by a staffing supplier.

Most companies assume that their staffing suppliers are 100% responsible for any issues that may arise with the temporary worker while they are onsite, including worker’s compensation claims and other HR concerns. However, without a proper agreement that’s supported by a certificate of insurance, you can’t be sure whether these expectations are being met.

Here’s a few risks your company might be exposed to unless the right agreement and insurance is in place:

Injured contingent workers could be deemed as your employees for worker’s compensation purposes – meaning both you and the staffing supplier are liable for claims made by your temporary workers.
The staffing supplier’s insurance company could try and make your company reimburse them for any payments make on behalf of the worker.
Your company could still be subject to labor-related fines and penalties, unless specifically stated.
Your company could be deemed liable for auto accidents involving a contingent worker if they were driving a vehicle while on their way to your workplace or while traveling to perform any other kind of work related task.
These are just some of the risks that not putting into place proper agreements with staffing suppliers can expose you to.

To mitigate these risks, it’s important that your agreement with the staffing supplier contain the appropriate indemnity and insurance provisions to protect your client. These agreements should always be reviewed by legal counsel prior to signing. It’s also crucial that the staffing supplier you are utilizing is financially strong enough to support the commitments of the agreement they are undertaking, as many staffing suppliers are not as financially stable as you may expect.

Click here to read the full article from The Rough Notes Company

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