Insurance coverage options to safeguard volunteers
Nonprofits may incorrectly assume their volunteers are covered under workers' compensation or general liability policies.
Those who volunteer their time to support nonprofit organizations are an invaluable asset. In fact, according to the Corporation for National and Community Service, nearly 77.34 million people volunteered through a nonprofit organization in 2019, providing an estimated national value of $25.43 for each volunteer hour.
With so much riding on the power of volunteers, how can your nonprofit clients offer these individuals some degree of financial protection if they are injured while performing organizational duties?
Workers’ compensation and volunteers
Injuries to volunteers might not be an everyday occurrence, but they happen. Organizations may incorrectly assume their army of volunteers is covered under workers’ compensation (WC) or an organization’s general liability insurance policy. The fact is, every state is different when it comes to WC coverage for volunteers. In most states, WC insurance does not extend to volunteers — only to paid employees.
However, there are some laws that stipulate that any type of payment in kind — such as providing room and board in lieu of a paycheck — would require employers to cover their volunteers under a WC policy. Given these circumstances, it is important for your nonprofit clients to evaluate their volunteer relationships and state law to determine whether they are required to provide coverage for WC.
Limited coverage under a general liability policy
While most nonprofits understand that their WC policy specifically excludes volunteers, they may believe that their general liability (GL) policy will provide coverage should a volunteer become injured while performing duties for the organization. However, a GL policy only provides limited coverage, such as when a volunteer trips, falls and becomes injured because the organization has been found to be negligent.
Options for organizations
If your client’s state is one of the majorities that does not allow WC insurance to cover volunteers, you can still present them with some options.
- Provide medical coverage under a volunteer accident policy. As a type of accident medical insurance policy, this coverage is designed to pay the medical bills and/or deductibles and copays (if coverage exists under another plan) if volunteers are injured while acting on behalf of the organization. Considered no-fault coverage, an accident policy provides immediate financial benefits to volunteers to help cover their medical expenses, and it can also help to reduce the likelihood of a lawsuit that may include compensations that stretch beyond necessary medical expenses. The cost of this type of policy is typically based on how many volunteers the organization has and what type of services the volunteers are providing.
- Require volunteers to sign waivers and hold-harmless agreements. Waivers and hold-harmless agreements state upfront to volunteers that the organization does not provide WC or any other medical insurance coverage. In the event a volunteer becomes injured while working for the organization, these types of waivers of liability make it clear that volunteers assumed the risk themselves. And while these agreements may not always hold up in court, they can be of value in outlining the safety measures volunteers are expected to follow and the risks they should avoid while performing their duties. In some cases, organizations will combine a volunteer accident policy with a type of liability waiver for additional protection.
Volunteers can be a cost-effective option for nonprofits to continue their good work without having to hire additional employees. However, it’s important for organizations to understand that there are inherent risks that come with the decision to utilize volunteers, and for you to educate your nonprofit clients on how they can best mitigate their exposure.
Maureen Dyson is an area executive vice president at Charity First Insurance Services, Inc, a program manager, offering retail insurance brokers nationwide with markets and products to meet the unique needs of the nonprofit community. She can be reached at Maureen_Dyson@charityfirst.com.
This piece first published on Charity First’s blog and is republished here with consent.
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