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?
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.
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.
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.
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.
Source – PropertyCasualty360.com