Temporary or Seasonal Workers Covered Under Commercial Insurance
During the busy holiday season or peak business periods, many Texas companies hire temporary or seasonal workers to meet demand. While this helps manage workloads, it also raises important questions about insurance coverage. Understanding whether these workers are protected under your commercial insurance policies is critical for avoiding liability and ensuring compliance with state laws.
1. Workers’ Compensation Coverage for Temporary Employees
In Texas, workers’ compensation coverage is optional for most private employers. However, if your business carries workers’ compensation insurance, temporary and seasonal employees are generally covered if they are on your payroll and performing job-related tasks. This means that if a temporary worker is injured on the job—such as in a warehouse, retail store, or restaurant—they are typically eligible for medical and wage-replacement benefits under your workers’ comp policy.
Things get more complicated if your business hires people through a staffing agency. In that case, the staffing agency will likely cover its employees' workers' compensation, and your company may be added as an additional insured party. It's important to carefully read contracts to make sure that everyone knows who is responsible for the insurance.
2. Liability Coverage for Seasonal Workers
Your general liability insurance helps protect your business from third-party claims, like property damage or customer injuries caused by employees. Seasonal workers are typically considered employees for liability purposes, meaning the policy should cover incidents involving them while performing work duties. However, this may not apply if the worker is classified as an independent contractor or hired through a third party without a formal agreement.
If you run a retail or service-based business, ensuring that all temporary hires are properly trained can help reduce the risk of accidents that might lead to liability claims.
3. Auto and Employment Practices Considerations
If seasonal workers drive company vehicles, you’ll need to verify that your commercial auto policy lists them as authorized drivers. Failing to do so can result in denied claims if an accident occurs.
Additionally, your employment practices liability insurance (EPLI) may cover claims of discrimination or wrongful termination involving temporary staff, depending on your policy’s terms.
4. Review and Update Your Coverage
Before hiring temporary or seasonal workers, it’s best to review your existing insurance policies with your agent. Make sure your workers’ comp, liability, and auto coverage include all active employees—temporary or permanent—to avoid coverage gaps during your busiest months.
