I know that this coverage can be added with Endorsement CG 20 21 07 98, additional insured – volunteer workers.  I spoke with one underwriter, and she said she wouldn't add this endorsement because it increased the exposure too much. Another underwriter that I know said she would consider it. What do you see as the pros and cons of adding this endorsement?

Florida Subscriber

A

This appears to be a reasonable request from the volunteers. From their standpoint, they're offering to help out for free. All they want is some protection from possible lawsuits they might get drawn into because of their good-heartedness.

Endorsement CG 20 21 adds volunteers as “insureds” and puts them in a position that is similar to that of employees. However, this extension of coverage does dilute the limits that are available to the park owner on the policy. In other words, settlement of a claim that includes a volunteer or arises out of his or her actions would draw down the aggregate limits of insurance that are available under the policy. This happens any time that more “insureds” are added to a CGL policy.

From a risk management standpoint, the most obvious difference between volunteers and employees is one of control. The park owner, who is insured under the CGL policy in question, surely has more control over his employees than he would have over volunteers. This probably is one of the main reasons that an underwriter would hesitate to attach the endorsement.

The trade-off for the volunteers themselves is that they lose access to coverage C, medical payments, by becoming  “insureds” under the policy.  Because of this, the volunteers do not have any good will medical coverage if they're injured while volunteering.  Unless the park owner provides accident insurance for them, they would have to prove the park owner was legally liable for injuries they sustain while volunteering in order to be compensated for them. They need to understand this before the coverage is added.

Your client may wish to have an attorney draw up a hold harmless agreement between volunteers and the park. This agreement should include the volunteer's acknowledgement that medical coverage for their own injuries while volunteering is not being provided, and that they will hold the park owner harmless for them. Individuals should be asked to read and sign the agreement before being allowed to volunteer. Even though these types of agreements might not be upheld in court, they are a risk management technique to document that the park owner did discuss the issue with potential volunteers. The agreement also officially notifies the volunteers about what they're giving up in order to obtain liability protection.

Despite these trade-offs, the coverage is valuable to the volunteers.