Summary: Individuals who choose to use their time for the benefit of others may be giving more than their time and effort when they choose to become volunteers. Although volunteerism is wonderful, charitable souls need to be aware of the risks that they face in assuming the role. This article provides an analysis of the liability risks that can go hand-in-hand with volunteering, and some ways organizations can ensure that their volunteers and employees are covered for injuries that occur.

Topics Covered:
Introduction
Volunteers in the CGL Form
Lack of Liability Insurance
Advantage of Liability Insurance
Other “Volunteer“ Situations
Endorsements
Government Intervention
Other Lines of Insurance
Relevant Caselaw
Conclusion

Introduction

One topic that seems to be pushed to the wayside is liability consequences in situations where volunteer workers are injured while volunteering. Americans spend roughly 7.9 billion hours volunteering every year. We spend time volunteering for religious organizations, political campaigns, and social and charitable functions. With this much time dedicated to volunteer situations, it is inevitable that injuries will be sustained while acting as a volunteer. Because of this risk it is important for volunteer organizations to procure the appropriate liability insurance so they can ensure their volunteers are covered in case of an accident.

Volunteers in the CGL Form

The distinction between a volunteer worker and an employee is important for CGL policies, as an employee would be covered under workers compensation for injuries sustained at the worksite, whereas a volunteer worker would have to seek coverage under the CGL policy for any injury sustained while volunteering. Volunteers are not mentioned in the CGL form until the coverage C section, which states, “We will pay medical expenses as described below for 'bodily injury' caused by an accident.”

There are seven exclusions listed for which the CGL policy will not provide coverage. “Any insured” is excluded from coverage, but there is an exception to the exclusion listed for “volunteer workers.” A volunteer worker under the CGL policy is automatically insured and is defined as “a person who is not your 'employee', and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you.” Although a new CGL form was implemented in 2013, there have been no direct changes to the status of a volunteer worker under that form.

Lack of Liability Insurance

If an organization fails to have liability insurance and the volunteer causes injury or damage to a third party, that volunteer must look to his own insurance policies, including homeowners coverage and personal auto policy, for coverage. If a volunteer himself is injured while volunteering, he must rely on his health insurance for medical payments coverage.

Advantage of Liability Insurance

If an organization does have liability insurance, under the current CGL coverage form a volunteer is insured while performing duties related to the conduct of the named insured's business. However, volunteers are not insured for injury to other volunteer workers while performing duties related to the business. The company's CGL form will provide medical payments coverage for an injury that a volunteer suffers as long as the injury is caused due to the operations of the named insured. Injuries caused by on-premises accidents are also covered if the injury occurs during operations of the named insureds business.

Other Volunteer Situations

An increasingly common situation is one in which an individual volunteers for a commercial employer, such as an amusement park or a concession stand, performing as a paid employee, but the compensation that the volunteer would otherwise receive is directly paid to the organization. The worker receives no direct compensation or wage statement. It is likely that, because the volunteer-organization is one step removed in the process, this will probably no longer be considered a volunteer activity; instead, it is basically a donation. If this issue does arise though, many issues relating to workers compensation should be raised, including whether the worker was a volunteer or an independent contractor, who directed the volunteer's actions, if specific training was required, and who provided that training.

Endorsements

An endorsement introduced by ISO in 2001 provides a means by which an insured can remove volunteer workers as insureds from the CGL policy since, as previously discussed, volunteer workers are automatically included in the basic provisions of the standard CGL policy. The relevant endorsement is CG 21 66 Exclusion – Volunteer Workers.

Government Intervention

In 1997 Congress passed the Volunteer Protection Act in order to provide “certain protections to volunteers, nonprofit organizations, and governmental entities in lawsuits based on the activities of volunteers.” The act explains that a volunteer may be less willing to participate in volunteer activities when there is potential liability for their actions, especially because of the higher costs volunteers and nonprofit organizations may face when purchasing insurance to cover activities. Because so many Americans depend on programs that are mostly sustained by volunteer workers, the government felt it was important to sustain these programs. Section four of the act describes several situations in which a volunteer shall not be liable for his own actions:

·If the volunteer was acting within the scope of his responsibilities as outlined by the nonprofit organization or governmental entity at the time of the action.

·If the volunteer was properly licensed, certified, or authorized for the actions that caused harm in the state in which it occurred (if appropriate)

·If the harm was not caused by willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed by the volunteer.

·If the harm was not caused by the volunteer operating a motor vehicle, vessel, aircraft, or other vehicle for which the state requires the operator or the owner of the vehicle, craft, or vessel to possess an operator's license or maintain insurance.

This act preempts any state law that is not consistent with the act; however, it does not preempt state law that provides additional protection to volunteers. The Volunteer Protection Act can be found at 42 U.S.C.A. §§ 14501 through 14505.

Other Lines of Insurance

D&O Personal Liability

The Volunteer Protection Act provides protection to not-for-profit organizations described in Section 501(c)(3) of the Internal Revenue Code of 1986 and any not-for-profit organization that is organized and conducted for the public benefit for charitable, civic, educational, religious, welfare, or health purposes.

The act defines “volunteer” as an individual performing services for a not-for-profit organization or governmental entity and who does not receive compensation for his services or anything of value, in lieu of compensation, in excess of $500 per year. This definition includes those who serve as a volunteer director, officer, or trustee. The act limits coverage to volunteers' acts that are within the scope of their responsibilities and only to ordinary negligence and do not constitute willful or criminal conduct, gross negligence, or reckless misconduct. Volunteers are also granted immunity from awards of punitive damages. Intentional torts, grossly negligent acts, or omissions of not-for-profit directors and officers are not covered by the act.

Homeowners

In the common homeowners policy, the insured will be covered if he causes property damage or bodily injury while acting in a volunteer capacity. Only property damage and bodily injury are covered though, so if the damages are only fiduciary or involve only a breach of fiduciary duties, coverage will not be provided under the homeowners policy.

Relevant Caselaw

In Philadelphia Indemnity Insurance Co. v. Youth Alive, Inc., 857 F. Supp. 2d 647 (W.D. Ky. 2012), a young man was asked by a representative of Youth Alive, Inc. to drive four other children home from a Youth Alive event. After an accident that resulted in significant bodily injury and loss of life, Youth Alive was denied coverage under its CGL policy when the court decided that the young man did not volunteer or offer to “donate his time” to work for Youth Alive. Instead he was a child participant signed up to benefit from the program who was spontaneously asked to drive four other kids home because of the close proximity to their homes, and compliance with this request did not make him a volunteer worker.

Conclusion

Individuals who choose to use their time for the benefit of others may be giving more than their time and effort when they choose to become volunteers. Although volunteerism is a wonderful thing, charitable souls need to be aware of the risks that they face in assuming the role.