June 6, 2018
For many nonprofits, volunteers are crucial to operations, often outnumbering employees. Because they are volunteering their time and energy to your operations, you should ensure they do not suffer financial or physical harm while serving the organization. A good risk management and safety program will help to prevent accidents but sometimes despite our best efforts, accidents happen.
When an employee gets hurt on the job, Workers’ Compensation insurance is their sole remedy for medical costs and time lost from work. When a volunteer gets hurt while working for your organization, payments for medical costs and time lost from work are not so clear.
Ways a Claim by Volunteers Might be Covered
Health Insurance – The volunteer’s own personal health insurance coverage (group or individual) will likely be the first source of immediate payment for medical costs associated with any accident.
General Liability – Medical Payments coverage under a General Liability Insurance policy is typically included. The amount of coverage available is usually between $5,000 – $50,000 per claim. This coverage is available regardless of fault and the organization does not need to be legally liable in the accident (auto accidents are excluded). Medical Payments can be made for direct medical expenses – secondary to any personal health insurance. Claims under the Medical Payments coverage on the General Liability policy will decrease the aggregate limits available for other claims and can increase future premiums.
General Liability Insurance can also cover injuries to volunteers if the organization is legally liable for the accident. This coverage would be available if the volunteer sues the organization to recover damages and the organization is found negligent.
Automobile Insurance – Injuries that happen in, on, or around an automobile may be covered by the medical payments or bodily injury coverages of the auto policy covering the auto in question. If the accident is the fault of an uninsured or underinsured motorist, that coverage may also apply. The insurance covering the involved auto will be primary for responding to any claims.
Workers’ Compensation Insurance – Your organization may be able to purchase an endorsement to cover volunteers as employees under your Workers’ Compensation policy. Typically, you will be charged premium based on a “payroll equivalency” for the work the volunteers are doing. For example, if the volunteers are providing assistance in a day care center – you will be charged premium based on the Day Care Center classification. You will be required to track the hours and work of every volunteer. If you purchase this coverage, it becomes the sole remedy for the injured volunteer. Claims by volunteers under the Workers’ Compensation policy can increase the organization’s experience modification factors and impact future insurance costs.
Accident Insurance – Volunteer accident insurance is the least expensive way of covering the medical expenses of volunteers. Accident Insurance can cover out of pocket medical expenses such as coinsurance and deductibles. If the volunteer does not have medical insurance, the policy will pay on a primary basis. Accident insurance can help protect the General Liability policy from claims, keeping future insurance costs down. Volunteer Accident Insurance shows that your organization is proactive and committed to the safety and well-being of your volunteers.
Claims against Volunteers
You should also make sure that your insurance policies are properly endorsed to protect the volunteer from claims made against them in the course of volunteering for your organization.
General Liability Insurance – Protects your volunteer from claims made against them for actions they undertake on behalf of your organization. If a volunteer is negligent in their duties and causes injury to someone, both the organization and volunteer will be protected by the General Liability policy (intentional acts and other exclusions may apply).
Automobile Insurance – Endorse your Automobile policy to include Volunteers as Insureds. That way the volunteer and the organization are protected if there is a claim for damages caused by a volunteer driving their own or agency vehicles.
Directors & Officers Liability (D&O) – Since most Directors and Officers are volunteers, this coverage is crucial. Because Directors and Officers have a high duty of care to the stakeholders, they can be held personally liable for decisions they make for the organization. Since their personal assets are at risk for those decisions, the organization should protect them with a good D&O policy.
CalNonprofits Insurance Services is the only social enterprise agency in California that is a subsidiary of CalNonprofits, the California Association of Nonprofits. Profit generated through CalNonprofits Insurance Services stays in the nonprofit sector and strengthens the nonprofit community. Our staff is ready to help you protect your nonprofit – including your volunteers. If you would like more information on coverage for your nonprofit, please call us at (888) 427-5222 or fill out this online form.