In many industries, it is common practice for businesses to supplement their workforce by taking on temporary workers. You need to be careful here as it depends on how they are hired as to how the policies respond.

The following information must be treated as a general guideline only. Insurers sometimes endorse their policies or add exclusions depending on the risk.

Named Insured

Person, company or firm named in the schedule. This usually includes all directors, shareholders, partners and employees.

An employee is ususally defined as any person who is employed by the insured and for whom you are required to have cover for Workers Compensation insurance.

Temporary Workers (casuals)

If workers are employed as casual or temporary employees, the employer will have to pay Workers Compensation insurance on them and they will be regarded as employees.

Sub-Contractors

Sub-contractors are normally employed for their expertise eg. a builder will sub-contract plumbing work out to a plumber because that requires an expertise. Sometimes normal jobs can be taken up by sub-contractors because the employer does not want to hire them. In these situations you need to be aware of the following:

1. The insured will generally be covered in the event they are sued if the sub-contractor causes an injury or damages property. The sub-contractor himself will not be covered by the insured's policy if he is not a named insured. The sub-contractor should have their own Public Liability insurance to protect themselves. 2. If the sub-contractor is working under a company structure, they will need Workers Compensation insurance and Public Liability insurance.

3. If the sub-contractor is not working under a company structure and basically works full time for the Insured, it is most likely the they will be deemed to be an employee as most Workers Compensation legislation will determine it this way and the definition of employee (refer above) extends to whom you are required to have cover for Workers Compensation insurance

Labour Hire

Some companies obtain workers from Labour Hire companies. These workers are employees of the Labour Hire company who pay Workers Compensation insurance on them.

The definition of insured does not extend to include these workers either, however our insured is covered if they get sued for injuries or damages caused by the labour hire employee.

The problem with Labour Hire employees is that if they get injured on the worksite, the Workers Compensation insurer can be in a position to sue the insured for not providing a safe workplace and recover all the costs associated with the injury.