Group Transportation Exposures
Every 14 seconds, a car accident results in an injured victim.* As such, group transportation – and the exposure related to the transportation of employees – continues to be a top concern among staffing firms and their insurers.
Often times, staffing companies are involved in the transportation of temporary employees from designated meeting spots to their client’s location due to logistics, workforce demographics, contractual obligations, etc. Although employee transportation may be a critical component to a client contract or a value added service, it can expose your firm to significant liability.
Coverage under Certain Policies
From an insurer standpoint, the primary concern with group transport is employee concentration and the potential for multiple fatalities or injuries that would result from a catastrophic accident. That said, group transport is often scheduled as an excluded task/class code on a staffing company’s workers’ compensation policy forms, especially Guaranteed Cost or small deductible programs.
For insured’s on a Loss Sensitive program, it’s critically important that the coverage trigger applies on a “per occurrence” basis in lieu of “per claim”. In the event of a catastrophic loss for a vehicle with multiple passengers, the insured could be financially responsible for multiple deductibles on a “per claim” program vs. single deductible for the accident or occurrence on a “per occurrence” policy form.
In the situation where transportation of employees is a key component for a client or agreed to in the statement of work, the use of a third party transportation company with commercial drivers and adequate limits of liability insurance is recommended. If an accident occurs while utilizing a third party transportation company, the staffing firm would have subrogation rights against the outside transportation company. However, the claim cost associated with the staffing firm’s employees would still be subject to the employer’s workers’ compensation policy. Although the burden of liability would likely be the responsibility of the transportation company, the loss would still adversely affect the employer’s workers’ compensation loss experience, which would drive future Experience Modification Ratings and renewal premiums.
Generally, an employee injured in their daily commute to and from work would not be considered a compensable under workers’ compensation statues. By providing employee transportation to jobs sites, the staffing employer is unnecessarily exposing their firm to potential significant workers’ compensation claims. If able, one of the best alternatives is to require that employees be responsible for their daily transportation to designated worksites.
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