Property Coverage for Businesses with Changing Needs

Some businesses have very stable property insurance needs as the value of their non-building assets, equipment and inventory doesn’t vary much during the year.

Other types of business experience wide variations in the value of their property. Florists tend to carry more stock around Valentine’s Day and Mothers’ Day than they do on most days of the year. Many retailers earn most of their profits during the holiday shopping season, so they keep larger amounts of stock on hand during that period.

Warehouses and manufacturers may have variable amounts of product on their premises with vastly different values. Depending on the flow of orders, the value of their stock may change greatly from month to month, or even more frequently.

A traditional property insurance policy will not meet the needs of businesses like these. To secure enough coverage, they would have to buy an amount large enough to cover those times when values are at their peak. But, for much of the year that would leave them paying for more insurance than they need.

Businesses in this situation may want to consider two coverage options:

Peak season coverage – This coverage is appropriate for firms that can predict those periods when their values will increase. Examples are florists, toy, electronics and clothing retailers during the holiday season, school supply stores in late summer, and costume shops in October.

The coverage form states the location and type of the property, the amount of additional insurance, and the period during which the higher amount applies. For example, it might show that insurance on goods for sale will increase by $100,000 from Oct. 1 to Jan. 1. This gives the business plenty of coverage for the busy time, but saves it from having to pay for all that coverage the rest of the year.

Value-reporting coverage – This coverage is for those firms with asset and inventory values that fluctuate all year long. It requires the business to buy an amount of insurance large enough to take care of the peak periods.

But, the insurance company will charge a lower initial premium than that amount would ordinarily require. The firm then must make periodic reports of its values to the insurer. Depending on the option chosen, this will mean sending reports monthly, quarterly or once per year.

Again, depending on the chosen option, the reports can show values as of the end of each business day, week, month, quarter or year. After the firm has submitted all of its reports for the policy period, the insurance company determines the business’s average values and calculates the final premium.

Firms that choose value-reporting coverage must take care to submit the required reports on time and accurately. The form gives the insurance company the right to reduce claim payments for losses to the property when reports are late.

The insurer can also reduce a loss payment if it finds that the policyholder underreported its values. The limit of insurance does not automatically increase if the reports show values higher than the limit; the firm must request an increase in coverage.

The takeaway

Any company with variable property values would be wise to consider purchasing one of these types of coverage. With some careful planning, a business can limit its insurance costs while still getting the coverage it needs. Call us if you have questions about this type of coverage or to discuss whether it’s appropriate for your operations.

Don’t Overlook Equipment Breakdown Insurance

Imagine it’s a typical July day. You own a 30,000-square-foot office building that is 85% occupied. And the air conditioning and ventilation systems stop working. The outside temperature is in the 90’s and the humidity is high. It doesn’t take long before the tenants start to complain.

The contractor you summon determines that an electrical arc fried the circuit board that controls the systems.

The board must be replaced, but it will take up to five business days for it to arrive. In the meantime, the building is unfit for people to work in, and the leases oblige you to credit tenants’ rents for periods when the building in uninhabitable for more than a day. In short, you face thousands of dollars in repairs and much more in lost rents.

While your property insurance policy will cover the resulting property damage from fires or explosions, it will not cover the equipment or lost income from the downtime during repairs.

But equipment breakdown insurance will.

Equipment breakdown insurance

This form of insurance is not a substitute for other property coverage. It will not pay for damage caused by fire, lightning, explosions from sources other than pressure vessels, floods, earthquakes, vandalism, and other causes of loss covered elsewhere.

Equipment breakdown policies are designed to fill in the gaps left by other policies, not to replace them. Also, they do not cover mechanical breakdowns that result from normal wear and tear as a device ages.

A number of events can trigger a claim for equipment, such as:

  • Mechanical breakdown in equipment that generates, transmits or uses energy, including telephone and computer systems.
  • Electrical surges that damage appliances, devices or wiring.
  • Boiler explosions, ruptures or bursts.
  • Events inside steam boilers and pipes or hot water heaters and similar equipment that damages them.

Business owners often overlook equipment breakdown coverage. Bur, virtually all of them have some need for this insurance.

What equipment breakdown insurance covers:

  • The cost of repairing or replacing the equipment.
  • Lost business income from a covered event.
  • Extra expenses you incur due to a covered event.
  • Limited coverage for losses like food spoilage in freezers that break down.

Most businesses rely heavily on machines in their daily operations, from computers to refrigeration equipment and elevators to manufacturing equipment.

For some, the cost of repairs to this equipment and resulting downtime can have a serious impact. Such businesses should seriously consider buying equipment breakdown insurance.
Call us if you would like to discuss this crucial form of coverage.

Commercial Auto Rates Face New Headwinds

Trucks, Route 66, California, USA

More accidents attributed to smartphone use while driving, coupled with much higher costs of repairs, have led to double-digit increases in commercial auto insurance rates over the past few years.

Distracted driving is just one of many factors that have converged on commercial auto insurance claims, resulting in sustained premium increases. Now there are new factors that are coming into play that will ensure that rates continue climbing, at least in the near term.

Commercial auto rates are increasing for companies with large fleets as well as for businesses with just a few vehicles and drivers. Here’s what’s at play and what you need to be aware of in the future.

Continuing factors

Distracted driving – This is the biggie. Starting a few years after the advent of smartphones in 2009, the steady decline in vehicle accidents and claims costs started to reverse when vehicular deaths started increasing for the first time in decades. The culprit, say many transportation safety experts, is distracted driving.

Repair costs – The cost of repairing vehicles has skyrocketed as cars have become more technologically advanced. A 2018 research paper by AAA found that vehicles equipped with advanced driver-assistance systems (ADAS) can cost twice as much to repair following a collision, due to expensive sensors and calibration requirements.

AAA cited the cost of repairing a car with windshield damage if it has an ADAS. The system uses cameras that are installed behind the windshield. These cameras need to be recalibrated after a windshield is replaced. This has increased the cost replacing such windshields to about $1,500, compared to $500 for a standard windshield.

Medical costs – Health insurance premiums and medical costs have been rising at a steady clip. Those increases carry over into the costs auto insurance companies incur when drivers and passengers are injured in an accident.

More miles driven – According to AAA, Americans are spending more time on the road. Driving more miles increases motorists’ likelihood of having an accident.

New and future risks

Weather-related property claims – A recent report in the insurance publication National Underwriter noted that commercial auto insurers say that the increasing frequency of large hurricanes, floods, hailstorms and wildfires are leading to higher auto physical damage claims. The number of property claims has been steadily increasing in the past decade as both the frequency and severity of major weather events grow.

Lack of experienced drivers< – As the economy expands, it’s become more difficult to find experienced drivers. Many experienced commercial drivers are retiring, and there are not enough job candidates with the skills and expertise needed to drive commercial vehicles.
The American Trucking Associations estimates that the industry is understaffed by more than 50,000 drivers, and this could increase more than threefold within eight years if current trends continue.

Security with onboard systems – As more vehicle functions become automated, new risks could surface from system failures that may result in accidents. There are number of technologies that come into play in new vehicles and a highly automated vehicle will rely on array of devices, including radar, light detection and ranging, cameras, graphics-processing units and central processing units.

As Cyber Attacks Rise, Is Your Business Protected?

Complex Circuit Board With Security Message

Cyber attacks on companies’ information systems and data have reached unprecedented proportions, and are growing with each passing year.

The biggest threat to an organization is if there’s been a breach of personally identifiable data or credit card information that it stores. That results in a number of costs, including notification costs, providing those whose data was compromised with credit monitoring, potential fines, legal costs if sued – and even reputational costs. If data is stolen, there are also restoration costs.

The threat is largest for smaller organizations. Because larger companies can afford to hire teams of technicians to thwart attacks, cyber criminals are increasingly targeting small and mid-sized organizations as they may not have the same resources to defend their data. The “2019 Internet Security Threat Report” by Symantec found that:

  • 48% of cyber attacks target small business.
  • Just 14% of small businesses rate their ability to mitigate cyber risks, vulnerabilities and attacks as highly effective.
  • 60% of small companies go out of business within six months of a cyber attack.

Ransomware

According to the Symantec report, in 2018, enterprises accounted for 81% of all ransomware infections. While overall ransomware infections were down, enterprise infections were up by 12% from the 2017 level.

With ransomware, hackers gain access to your IT system, lock it down and demand a ransom to release it. The ransom usually has to be paid in bitcoin or other cryptocurrency so that the criminals can avoid detection.

Phishing and malware

One of the most common ways for criminals to compromise an organization’s data is through phishing, a process through which employees are sent e-mails with links, which if they are clicked, gives the hackers entry into the company’s computer systems. Malware is usually the code that is inserted into the computer system to either slow systems down or to access the information.

What you can do

  • Install anti-malware software – This can weed out the latest malware before it does damage.
  • Keep your software up to date – Using up-to-date versions of operating systems, applications, firmware and browser plug-ins helps protect against the latest threats by patching security vulnerabilities.
  • Use strong passwords – Use a password manager tool to generate unique passwords and securely store your log-ins.
  • Lock down your devices – If your staff uses company-owned devices, or you allow them to use their own, require that the devices are locked with a password, fingerprint or other method.
  • Think twice before downloading – Remind staff to be cautious about downloading new software or browser plug-ins.
  • Click carefully – Teach your staff to look for telltale signs of phishing e-mails that prompt them to click on malicious links.

The ultimate protection

Cyber-liability insurance covers losses that result from data breaches and other cyber events.

While cyber-liability policies vary among insurers, there are some common threads:

Loss or damage to data – Many policies cover the costs to restore or recover lost, stolen or corrupted data, and may also cover the cost of outside experts or consultants you hire to preserve or reconstruct your data.

Loss of income or extra expenses – Many policies cover income you lose and extra expenses you incur to avoid or minimize a shutdown of your business after your computer system fails due a covered peril. The perils covered may be the same as those covered under damage to electronic data.

Cyberextortion losses – Cyber-extortion coverage applies when a hacker or a cyber thief breaks into your computer system and demands a ransom to unlock it, or to not damage the data. Extortion coverage typically applies to expenses you incur (with the insurer’s consent) to respond to an extortion demand, as well as the money you pay the extortionist.

Notification costs – Policies may cover the cost of notifying parties affected by the data breach by government statutes or regulations. They may also include the cost of hiring an attorney to assess your firm’s obligations under applicable laws and regulations.

Network security liability – This covers lawsuits that individuals or companies file against your organization alleging negligence on your part for failing to adequately protect data belonging to customers, clients, employees or other parties.

As Health Deductibles Rise, Employees More Likely to File Workers’ Comp Claims: Study

Scales on white background

Sometimes, injured employees are afraid to file a workers’ comp claim after being injured at work because they fear the specter of retaliation by their employer.

Experts suspect that up to 10% of workplace injuries are never reported because the workers choose to have the injuries covered by their employer-sponsored health plans. Most employers may not be aware of the full extent of their workplace injuries because of this phenomenon.

But, that could change as workers are saddled with higher deductibles and out-of-pocket expenses, according to a new study.

A number of past studies have found that if the costs to workers for having their personal health insurance cover a workplace injury is less than the “cost” to them of filing a workers’ comp claim, they will opt to have their health insurance cover it instead.

Here’s what studies have found over the years:

  • A 1996 study found that workers without health insurance have an incentive to claim their medical issues are work-related even if they are not, so that workers’ compensation insurance will pay for care. The study also found that if the injury occurs at work, health insurance may deter workers from filing for workers’ comp if they feel there is a cost to filing a claim.
  • A 2007 study found that a genuine workers’ comp claim can be “costly” to file for a worker if:
    • The employer dissuades workers from filing workers’ comp claims because they fear the claims will increase their premiums.
    • The injured worker does not want to deal with the paperwork for a workers’ comp claim.
    • The individual feels there is a stigma associated with filing for workers’ comp.
  • A 2003 study of Michigan workers and their physicians found that 70% of injured workers did not file for workers’ comp, and that 36% of the non-reporting injured workers cited having health insurance as a reason they did not.

What could be ahead

The most recent study, by the Workers’ Compensation Research Institute (WCRI), found that injured employees are more likely to file workers’ compensation claims when they have high-deductible group health plans.

The study found that workers with a remaining group health insurance deductible that exceeds $550 are more likely to file workers’ comp claims than if the deductible were less. As more workers find themselves staring at higher health insurance deductibles, they will properly report their workers’ comp claims to their employers.

“In years past, workers may have chosen to have a work injury covered within their group health plan,” John Ruser, WCRI president and CEO, said in a statement. “But the increasing cost of deductibles may cause them to consider having the injury covered ─ where it potentially belongs ─ in the workers’ compensation system, where there are no deductibles or copayments for the medical care they receive.”

This is likely to add about 5% more claims into the system, the WCRI found.

What you can do

There are risks to both your employee and your organization if a worker does not report their workplace injury.

Urge your workers to report any workplace injuries so that you can have them properly treated. If a worker decides to not report the claim and they have their health insurance pay for it, problems can take root and cause major issues for you later:

  • Your insurer loses the chance to direct the initial treatment to an occupational health clinic that specializes in treating workers’ compensation injuries and coordinates with the employer’s return-to-work program.
  • A delay in seeking treatment may cause a deterioration in the employee’s condition that will impede their recovery time.
  • It impedes the insurance company’s ability to investigate a claim, determine compensability and identify claims fraud.

A New Approach to Preventing Workplace Injuries

Metal Roof Roll Forming Machine

While overall workplace injuries have been falling in the last decade, the numbers of deadly and catastrophic injuries are actually on the rise.

A new report recommends that employers focus their injury prevention efforts on reviewing accidents that could have resulted in serious injury or death, as well as on near misses, where a potentially serious accident was narrowly avoided.

The “Serious Injury and Fatality Prevention: Perspectives and Practices” report, by the Campbell Institute, recommends that employers focus on their internal processes that could lead to serious injuries and fatalities, rather than on human error itself.

They should focus on identifying and fixing holes in their safety management system, examine their workplace culture, and change or modify work processes so as to eliminate the chances of human error affecting safety.

The report recommends that organizations don’t put the blame on the injured worker, but instead take a look at internal factors that contributed to an accident. To identify events or near events that could have led to serious injury or death, the prevention model in the report recommends focusing on and studying:

  • Precursors to accidents
  • Near misses
  • All recordable injuries

By identifying potential precursors to such events and educating employees about those precursors, companies can focus on eliminating the potential for accidents to occur in the first place.

One key component of this method is to identify which smaller accidents or near misses had the most potential to inflict serious injury or death.

Recommendations

Establish a system for reporting near misses. Consider:

  • Addressing issues such as workers being afraid of the consequences of reporting a near miss. Try to instill trust among your workers that they won’t be punished for a near miss, and that reporting them can help prevent future serious injuries.
  • Define what constitutes a near miss.
  • Include near-miss training during new employee orientations.
  • Get buy-in from management and supervisors to foster a culture of reporting near misses.
  • Make reporting simple and straightforward.
  • Make sure that your investigation includes a precise log of what led up to the near miss, as well as the root cause.
  • Take corrective action after conducting the investigation.

When rolling out the plan, hold a safety meeting explaining to employees why the company is focusing on the smaller incidents and near misses, and how a minor incident can turn major. Explain the importance of looking at potential rather than actual outcomes for minor incidents.

Try to be innovative in how you tackle workplace safety. For example, an article in Risk and Insurance magazine looked at a number of large employers that have worked with the criminology departments of nearby colleges to analyze injuries and near misses, in order to help identify what they could have done to prevent them.
The magazine’s report found that employers that used this method saw significant reductions in the number of workplace injuries they experienced.

OSHA Not Letting Up on Inspections, Penalties

industrial safety

Despite expectations, Fed-OSHA under the Trump administration has not backed off on enforcing workplace safety regulations.

In fact, the agency is as aggressive as ever and citations are higher than ever as well, after fines were increased substantially three years ago. Based on the agency’s own statistics, a company that’s inspected has only a 25% chance of not receiving a single citation.

In other words, employers should not let up on their safety regimens to not only avoid being cited but also to avoid workplace injuries, which nobody wants.

Here’s what’s going on with OSHA.

Enforcement emphasis still going strong – There are more than 150 local and regional enforcement emphasis programs as well as nine national programs in effect that were implemented at the end of the Obama administration. OSHA is dutifully enforcing them all.

Budget bucks the trend – Despite the budget-cutting at many federal agencies, OSHA saw a $5 million increase in its fiscal year 2019 budget from the year prior. Most notably, that was the first budget increase since 2014. In addition, state-run OSHA programs also received a small budget enhancement of $2 million.

Fines increasing – There has been no attempt to reverse the maximum fines for workplace safety violations. They were increased substantially in 2016, thanks to new regulations that require that the fines be increased every year after to keep up with inflation.

At the start of 2015, the maximum fines were:
• Serious or other-than-serious posting requirements: $7,000
• Failure to abate beyond initial violation date: $7,000 per day the condition continues
• Willful or repeat violations: $70,000

For 2019, the following fines apply (and they increased about 2.5% across the board):
• Serious or other-than-serious posting requirements: Up to $13,260
• Failure to abate beyond initial violation date: Up to $13,260 per day
• Willful or repeat violations: Minimum of $9,472, up to $132,598

Inspections stable – The number of inspections has stayed the same as years prior.

Focus on repeat violators – A continued focus on repeat violations has continued, with 5.1% of all violations in this category. The percentage has been over 5% since FY2016.

General duty clause – There has been continued expansion of the general duty clause to cite employers for heat stress, ergonomics, workplace violence, and chemical exposures below the permissible exposure limit.

New emphasis

And 2018 also saw a new effort by OSHA to fine-tune its work. It issue a memo in May that formalized the use of drones (with the employer’s consent) to collect evidence. This has been somewhat controversial because it could enhance its ability to find other violations it might not normally find.

According to the Fiscal Year 2019 Congressional Budget Justification for the Occupational Safety and Health Administration, increased enforcement seems to be more likely than a decrease. It also seems, although there have been no officially released statements, that the new electronic injury and illness reporting information will be used by OSHA and state plans to increase enforcement.

The increased budget, according to the Congressional Budget Justification, will support additional compliance safety and health officers to provide a greater enforcement presence and provide enhanced technical assistance to employers who need help in understanding how to achieve compliance with OSHA standards.

Employee Embezzlement on the Rise – Are You Protected?

A typical organization will lose an estimated 5% of its revenues every year due to fraud, according to a study by the Association of Certified Fraud Examiners.

The median loss among organizations both large and small was $140,000 per occurrence, and more than 20% of embezzlement losses were more than $1 million, the association found.

With those staggering numbers in mind, if you have not already done so, you need to take steps to reduce the possibility of employee theft – and also make sure you are adequately covered if they do steal from you.

Small organizations are especially susceptible to losses from employee embezzlement. These problems are often seen in cash-heavy businesses, or those with large inventories, but employee embezzlement is most frequently experienced in organizations lacking owner oversight of financial processes, usually due to placing far too much trust in employees and having no internal controls.

The new study by the fraud examiners association was released as another study, this one by professional security firm Marquet International, found that arrests and indictments for embezzlements had reached a five-year high in 2012.

Embezzlers are most likely to be a company bookkeeper, accountant or treasurer, who is female, in her 40s, and without a criminal record. The reason it’s more often than not a woman is that they are typically in the three aforementioned jobs.

How do they do it?

Marquet International in its study found that the most common ways of embezzling are:

  • Bogus loan schemes, which include cases in which fraudulent loans are created or authorized by the perpetrator from which funds are taken for their own benefit.
  • Credit card/account fraud cases, which involve the fraudulent or unauthorized creation and/or use of company credit card or credit accounts.
  • Forged/unauthorized check cases, which are those in which company checks are forged or issued without authorization for the benefit of the perpetrator.
  • Fraudulent reimbursement schemes, which include expense report fraud and other cases in which a bogus submission for reimbursement is made by the perpetrator.
  • Inventory/equipment theft schemes, including those cases in which physical corporate assets were stolen and sold or used for the benefit of the employee.
  • Payroll shenanigan cases, including all forms of manipulation of the payroll systems in order for the perpetrator to draw additional income.
  • Theft/conversion of cash receipt cases, which involve the simple taking of cash or checks meant for company receipts and pocketing or converting them for one’s own benefit.
  • Unauthorized electronic funds transfers, including those cases in which wire transfers and other similar transfers of funds are the primary mode of theft.
  • Vendor fraud cases, which include those where either a bogus vendor is created by the perpetrator to misappropriate monies or a real vendor colludes with the perpetrator to siphon funds from the company.

Thwarting embezzlers

Liability insurer Camico suggests that educating employees on the detrimental effects of employee fraud on the organization can reduce the likelihood of embezzlement.

Also, if you implement a regular review of bank and credit card statements, you’ll have a better chance of catching a thief. Company owners should look at the cleared transactions to determine the legitimacy of payees, including examining actual cancelled checks.

Also, it’s easy for transactions to be changed in the accounting system after the fact. An ill-intentioned bookkeeper could use this tactic to cover up their tracks. If you feel you do not have the time or expertise to oversee you finance department, you should contract with a qualified CPA to perform these checks and balances.

There are also inexpensive physical barriers that should be used to deter criminal activity. To protect cash, you can buy a $200 drop-slot safe to securely keep the night’s deposit until it is taken to the bank.

Similarly, security cameras deter misbehavior and can be the source of valuable evidence in case an incident occurs.

Securing coverage

Finally, you should consider taking out a crime insurance policy.

Most business insurance policies either exclude or provide only nominal amounts of coverage for loss of money and securities as well as employee-dishonesty exposures.

But a crime insurance policy protects against loss of money, securities or inventory resulting from crime. Common crime insurance claims include employee dishonesty, embezzlement, forgery, robbery, safe burglary, computer fraud, wire-transfer fraud, and counterfeiting.

Call us to discuss whether a crime policy is right for your company.

Massive Breach Exposed 773 million E-mails, Passwords

News of the latest global data breach of some 773 million e-mail address and passwords should prompt individuals and organizations alike to change their passwords – particularly for any accounts that have financial, credit card or other personal information.

The scope of this breach cannot be overstated as the list includes log-in credentials from more than 2,000 websites, according to an article on the website Marketwatch, which cited a report by security researcher Troy Hunt.

Hunt said that the files were collected from a number of breaches and uploaded to a cloud service called MEGA, and the data was promoted on popular hacking forums. MEGA eventually removed the data, so it’s not clear how many hackers gained access to the files.

Considering the size and scope of the data trove, you should immediately change your passwords on sites such as:

  • Your online e-mail services (like Gmail, Hotmail, etc.)
  • Your banking and other financial services accounts (retirement accounts, credit cards, etc.)
  • All of your social media accounts.
  • E-commerce sites.
  • Subscription sites and other sites that store your credit card information.

Hunt has created a page on his website for anybody to check to see if their e-mail address and passwords were compromised. You can check here for free: www.haveibeenpwned.com.

Hunt said even his own data appeared in the giant trove of stolen e-mails and passwords, despite his intensive security practices as a privacy professional.

If you have employees, you should notify all of them about the breach and urge them to change their passwords. It should be an organization-wide endeavor.

To best protect your privacy, Hunt recommends using strong passwords, a password manager and two-factor authentication. Two-factor authentication requires users to input a code sent to their phone or e-mail for log in, adding an extra layer of security

Top five password tips

  1. Adopt long passwords – And don’t use things like $ for the letter “s” or 3 for “E”, and other such changes that hackers are on to.
  2. Avoid periodic changes – Instead, change your passwords only when you feel there has been a threat. Most people will recycle old passwords or make small changes to their existing password.
  3. Create a password blacklist – Use this as the list of codes to avoid when making a new password.
  4. Implement two-factor authentication – Two-factor authentication has already become a de facto standard for managing access to corporate servers. In addition to traditional credentials like username and password, users have to confirm their identity with one-time code sent to their mobile device or using a personalized USB token.
  5. Organize regular staff training – Nearly 41% of company data leaks occur because of negligent or untrained workers who open phishing e-mails. It’s important to train employees to detect and avoid phishing and other social media attacks.

OSHA Stays Serious About Temp Worker Safety

While the Trump administration has eased off a number of regulations and enforcement actions during the past two years, Fed-OSHA continues focusing on the safety of temporary workers as much as it did under the Obama presidency.

This puts the onus not only on the agencies that provide the temp workers, but also on the companies that contract with them for the workers.

As evidence of its continued focus on temp workers, OSHA recently released guidance on lockout/tagout training requirements for temporary workers. This was the third guidance document released in 2018 and the 10th in recent years that was specific to temp workers.

One reason OSHA is so keen on continuing to police employers that use temporary workers, as well as the staffing agencies that supply them, is that temp workers are often given some of the worst jobs and possibly fall through the safety training cracks.

OSHA launched the Temporary Worker Initiative in 2013. It generally considers the staffing agency and host employer to be joint employers for the sake of providing workers a safe workplace that meets all of OSHA’s requirements, according to a memorandum by the agency’s office in 2014 to its field officers.

That same memo included the agency’s plans to publish more enforcement and compliance guidance, which it has released steadily since then.

Some of the topics of the temp worker guidance OSHA has released since the 2014 memorandum include:

  • Injury and illness record-keeping requirements
  • Noise exposure and hearing conservation
  • Personal protective equipment
  • Whistleblower protection rights
  • Safety and health training
  • Hazard communication
  • Bloodborne pathogens
  • Powered industrial truck training
  • Respiratory protection
  • Lockout/tagout

Joint responsibility

OSHA started the initiative due to concerns that some employers were using temporary workers as a way to avoid meeting obligations to comply with OSHA regulations and worker protection laws, and because temporary workers are more vulnerable to workplace safety and health hazards and retaliation than workers in traditional employment relationships.

With both the temp agency and the host employer responsible for workplace safety, there has to be a level of trust between the two. Temp agencies should come and do some type of assessment to ensure the employer meets OSHA standards, and the host employer has to provide a safe workplace.

Both host employers and staffing agencies have roles in complying with workplace health and safety requirements, and they share responsibility for ensuring worker safety and health.

A key concept is that each employer should consider the hazards it is in a position to prevent and correct, and in a position to comply with OSHA standards. For example: staffing agencies might provide general safety and health training, and host employers provide specific training tailored to the particular workplace equipment/hazards.

Successful joint employer relationship traits

  • The key is communication between the temp agency and the host to ensure that the necessary protections are provided.
  • Staffing agencies have a duty to inquire into the conditions of their workers’ assigned workplaces. They must ensure that they are sending workers to a safe workplace.
  • Ignorance of hazards is not an excuse.
  • Staffing agencies need not become experts on specific workplace hazards, but they should determine what conditions exist at the host employer, what hazards may be encountered, and how best to ensure protection for the temporary workers.
  • The staffing agency has the duty to inquire and verify that the host has fulfilled its responsibilities for a safe workplace.
  • And, just as important, host employers must treat temporary workers like any other workers in terms of training and safety and health protections.

For a look at all 10 of the guidance documents OSHA has issued in the last few years, visit the agency’s temp worker page: www.osha.gov/temp_workers/