What the form is
The CR 50 10, titled "Include Leased Workers As Employees," is an endorsement to a commercial crime insurance policy. Its primary purpose is to amend the definition of "employee" within the policy to encompass leased workers. This means that for the purposes of crime coverage, individuals leased to the named insured by a labor leasing firm are considered employees of the insured.
Classes of business it applies to
This endorsement is relevant for any business that utilizes leased employees and carries a commercial crime insurance policy. This is common in various industries where companies supplement their workforce through staffing agencies or professional employer organizations (PEOs). For example:
- A manufacturing company that leases temporary workers for a specific production run.
- An administrative office that uses leased secretarial or clerical staff.
- A hospital or healthcare facility that brings in leased nurses or technicians.
In these scenarios, if a leased worker were to commit an act of employee theft, this endorsement would allow the insured business to claim the loss under their crime policy, subject to its terms and conditions.
Special considerations
It's important to note that this endorsement was developed as part of the 1998 Multistate Commercial Crime Revisions by ISO. Insurers may have their own proprietary versions of this endorsement, or its adoption might vary by state. The definition of a "leased worker" within the endorsement should be carefully reviewed to ensure it aligns with the insured's contractual arrangements with the labor leasing firm. Without this endorsement, acts of dishonesty by leased workers might not be covered under a standard crime policy, as they may not meet the traditional definition of an "employee."
Key information for agents and underwriters
For Agents: When discussing commercial crime coverage with clients who utilize leased staff, it is crucial to identify this exposure and recommend the CR 50 10 endorsement or its equivalent. Failing to do so could result in a significant uninsured loss for the client. Agents should inquire about the extent of the client's use of leased employees and the nature of their responsibilities.
For Underwriters: When this endorsement is requested, underwriters should assess the controls and screening processes of both the insured and the labor leasing firm. The quality of the leasing firm's hiring practices for leased employees can impact the risk profile. Underwriters might also consider the number of leased employees, their access to company assets, and the overall management and supervision provided by the insured. Pricing considerations may involve evaluating the additional exposure brought by including leased workers under the definition of employee.