Labour Hire Injuries: Who Pays?

Generally the labour-hire agency's workers compensation pays the statutory claim, because the agency is usually the worker's legal employer - though workers compensation arrangements vary by state. If the worker also brings a common-law negligence claim against you as the host, that claim is yours to answer, and it generally isn't covered by your own workers compensation. Host employer liability cover is the policy designed to respond to it, subject to the terms.

Yes, an injured worker can generally bring a common-law claim against the host if they allege the host's negligence caused the injury. The host controls the site, the plant and the systems of work, so a claim will usually focus on how those were run. Whether and how common-law claims proceed differs between state schemes, so treat this as general information - but the exposure is the reason host employer liability cover exists.

Generally no. Your workers compensation policy covers your own employees under your state's scheme. A labour-hire worker is usually employed by the agency, so their statutory entitlements run through the agency's policy, and a claim against you from that worker generally falls outside yours. Workers compensation is state-based, so confirm the position under the scheme where you operate.

Often not without specific wording. Public liability policies commonly exclude injury to people performing work for the insured, and labour-hire workers under your direction can be caught by that exclusion. Some insurers offer a host employer liability extension that adds the cover back; otherwise it needs to be arranged separately. Read the wording, or send it to us and we'll read it for you.

After the agency's workers compensation insurer pays an injured worker's statutory claim, it may have rights to recover that outlay from a negligent third party - and if the insurer considers the host's negligence contributed to the injury, the host can be that party. Recovery rights vary between state schemes. Host employer liability cover is designed to respond to these actions, subject to the policy terms.

Public liability with host employer liability included or extended, sitting alongside your normal program: workers compensation for your direct employees, and the property, business interruption and other covers in your business pack. It's also worth pulling the insurance clause out of your labour-hire agreement itself before workers start - it can require specific covers and minimum limits of each party, and your policy needs to match what you've signed. If you're the labour-hire agency rather than the host, the program looks different - public liability, professional indemnity for placement and vetting errors, and workers compensation for your on-hired workforce. Our labour hire insurance page covers the agency side.