Many trucking companies and dealerships also utilize drivers and sales brokers, considering them as non-employees, as part of their daily business activities.  To fulfill the need for a temporarily increased staff, most businesses will turn to a staffing service, while others will hire acquaintances.  Recognizing the many benefits, many dealerships hire temps and independent contractors to perform such duties as janitorial services, building repairs, maintenance and bookeeping as part of their routine business practices, but there are some disadvantages as well.

Liability policies available to auto dealers contain some variation of a garage policy form.  Will your garage form policy cover you and any independint contractor, temporary or volunteer workers for situations that are not auto related?  You, your partners, directors and employees are considered insured while acting within the scope of tehir employment with your dealership.  By definititon, the individuals that an insurance company considers as employees include leased workers, but do not include temporary workers.  Leased worker is definied as a person leased to you by a labor leasing company under an agreement betweenm you and the leasing company, but does not indluce a temporary worker.  The insurance industry standard for defining a temporary worker is a perosn who is furnished to you to subsititue for a permanent employee that is on leave or to meet seasonal or short-term workload condiditons.

Our example in our opening paragraph concerning the need to briefly incrase your staff may leave you without coverage under the garage form if your addition to staff fit the temporary worker definititon in your policy and not the leased worker definition. 

  

Volunteer workers would not fall in to the leased or temporary worker categories.  Since they are not addressed in the garage form coverage they would not fit into the defniition of employee. 

A Commercial General Liability Policy (CGL) contains the same provisions discussed int eh garage form with one exception.  This policy includes a defninition for volutneer worker.  The CGL polict defines volunteer worker as a person who is not your employtee and who donates his or her work and acts at the direction of and within the scope of duties determined by you and they are not paid a fee, salary or other compensation by you or anyone else for their work performed for you.  This definition has been added because the CGL policy includes volunteers as insureds and distinguishes them from employees and other insureds. 

  

Under the CGL policy, volunteers would be considered insureds in our example of briefly increasing your staff; buy by definition temporary workers would not be considered insureds. 

The definitions of employees and other workers can vary greatly among your other coverages.  For example, one Employment Practices Liability Insurance Policy recently reviewed defines an employee as any person whose labor or service is engaged and directed by you and includes applicants for employment, lease, part-time, seasonal and temporary workers, and volunteers.  Other coverages such as Wokers Compensation and Crime will contain another variation for defining employees and other workers.  Audits by your workers compensation carrier can lead to penalities and premium adjustments if they determine that any of your independnt contractors do not have their own workers compensation coverage and become eligible under your coverage.  You should require your independent contractors to carry their own worers compensation and liability coverages. 

  

These definititions alone do not determine how your coverage will apply to a situation, requiring a thorough review of your policies to determine how they will apply to these different employment arrangements.  if you utilize the services of a temporary staffing agency or employee leasing agency, require that they provide you with their insruance information and have any contracts between you and the agency, including the agency's insurance coverages, reviewed by your attorney.  Consider having your cmpany added as an insured to the employment agency policies.   

Utilizing independent contractors should be discussed with your insurance agent, accountant and attorney to make sure your agreement with an independent contractor is detailed and that your insurance policies are providing you with the best coverage avaialble.  These individual workers can create employment practices liability issues for and they should be made familiar with your company's procedures.  Although you many not consider them to be employees, they can become victims of employment discrimination and in some states you may be held liable even though the individual is an employee of a leasing or temporary employment agency.