The Alternate Employer Endorsement (AEE) is an endorsement added to a workers compensation policy that provides an entity scheduled as an alternate employer with primary Workers Compensation and Employers Liability coverage as if it were an insured under the policy. It also states that it will not ask any other insurer of the Alternate Employer to share in the loss covered by the endorsement.
The Alternative Employer Endorsement is often used when businesses utilize contracted employees through temporary employment/staffing agencies or subcontractor vendors, in order to avoid workers' compensation lawsuits. The temp agency or subcontractor agency remains the worker's primary employer, with coverage that applies only to work performed by the temporary or leased workers under that contract or for the duration of that project.
The Alternate Employer Endorsement is a valuable tool for businesses that utilize temporary, leased or contracted employees. It can help to protect the business “Alternate Employer” from Workers' Compensation and Employer Liability lawsuits. As businesses seek to take advantage of the various benefits of contracting versus full employment, utilizing an Alternate Employer Endorsement can be a smart plan to protect and manage risk with contracted or seasonal staff members.