Public Liability Insurance Under Labour Hire Contracts
When a company requires more workers, it might opt to recruit through a third party, commonly referred to as labour-hire contracts. Labour hire is an efficient and straightforward way of expanding your staff for a specific period. However, such an arrangement between a host employer and a labour-hire firm could lead to challenges in public liability insurance. This article examines public liability insurance under the labour-hire arrangement.
What is Labour Hire Contract
Labour hire involves a host employer who engages a labour-hire company to provide temporary or casual staff. Therefore, a host employer can expand or deflate its workforce based on the demands of a business. Also, labour-hire is ideal for blue-collar and white-collar industries, including transport, legal, accounting, cleaning, and construction. In a labour-hire arrangement, legal claims from property damage and personal injury might arise from third parties and on-hired workers.
Labour Hire Policy
A host employer should insure a business against claims arising from incidents involving on-hired workers. The reason is that on-hired staff work under the control, supervision, and direction of the host employer. Further, on-hired employees work within the host employer's workplace. Therefore, the host employer must take up public liability insurance to cover negligence claims brought against on-hired workers. A public liability policy covers personal injury caused or suffered by an on-hired worker or property damage caused by such an employee. Some insurance companies have tailor-made labour-hire insurance coverage options for businesses.
On-Hired Workers' Responsibility
If an on-hired staff causes property damage or personal injury, who is liable for claims brought against the worker? A general rule for property damage or personal loss is that liability should apply proportionately. The fact implies that a court apportions liability between all wrongdoers, including the host employer, the on-hired worker, and the labour-hire company. Therefore, all parties share responsibility for claims made, albeit in different proportions based on the nature of negligence.
Check the Public Liability Fine Print
In most circumstances, labour-hire firms attempt to transfer liability involving on-hired workers to host employers. Therefore, work with your attorney to ensure indemnities and insurance clauses are checked. Note that an insurer will only pay part of the liability as agreed in the contract and nothing more. Your insurer will not pay the whole claim if a contract states that a labour-hire company should foot part of the liability. Also, ensure that indemnity clauses in public liability insurance contracts are fair to both parties. Similarly, indemnity clauses should be easy to enforce in case of injury or property damage claims.