Alternate Employer Endorsement
A workers comp endorsement extending coverage to a client company using the named insured's employees, such as through a staffing or temp agency arrangement.
What It Is
The Alternate Employer Endorsement (WC 00 03 01 A or equivalent) is a workers compensation endorsement that extends the named insured's workers comp coverage to protect a client company (the alternate employer) that is using the named insured's employees. This is most commonly used in temporary staffing arrangements, where a staffing agency (the named insured) sends workers to a client company (the alternate employer).
The endorsement names the alternate employer on the staffing agency's policy and provides that the staffing agency's workers comp will respond if one of its temporary workers is injured while working at the alternate employer's location. This protects the alternate employer from claims that it is a statutory employer of the temporary workers.
Without this endorsement, the client company faces the risk that an injured temporary worker could claim the client company as their employer for workers comp purposes, triggering the client company's own workers comp policy or creating uninsured exposure.
Why It Matters for Brokers
Staffing agencies and their broker must understand the Alternate Employer Endorsement because it is commonly required by client companies as a condition of the staffing contract. The endorsement protects both parties — the staffing agency retains control of the workers comp coverage for its employees, and the client company receives assurance that the staffing agency's policy will respond to injuries. Brokers placing staffing agency accounts should ensure this endorsement is available and properly scheduled.
Real-World Example
TempForce Staffing Agency places 12 workers at Acme Manufacturing's warehouse. The staffing contract requires TempForce to carry workers comp with an Alternate Employer Endorsement naming Acme. A temporary worker injures his back lifting boxes, generating $95,000 in workers comp claims. Because TempForce's policy has the Alternate Employer Endorsement naming Acme, the claim is handled entirely under TempForce's workers comp policy. Without the endorsement, Acme might be deemed a statutory employer, and the claim could trigger Acme's own workers comp policy, increasing Acme's EMR.
Common Mistakes
- 1Not adding the Alternate Employer Endorsement when the staffing contract requires it, leaving the client company exposed to statutory employer claims.
- 2Failing to update the schedule of alternate employers when the staffing agency takes on new client companies mid-term.
- 3Confusing the Alternate Employer Endorsement with a standard additional insured endorsement — they serve different purposes on different policy types.
How brokerageaudit.com Handles This
Policy Checker identifies Alternate Employer Endorsements on workers comp policies and verifies the schedule of named alternate employers. It cross-references the schedule against active staffing contracts in the account record. COI Manager includes Alternate Employer status on certificates issued for staffing agency accounts, referencing the specific endorsement.