Does Your Nonprofit Need Coverage for Volunteers? | World Insurance

Despite the charitable nature of nonprofit organizations, there are some essential guidelines they must follow to prevent risks to themselves. Although they have different goals than traditional businesses, volunteer-driven nonprofits need to protect their team, and while nonprofits operate differently than traditional businesses, they share some of the same risks and liabilities. This article will explore what types of coverage for volunteers nonprofit organizations require. 

What Type of Liabilities Do Volunteers Face? 

To better understand why nonprofits need coverage for volunteers, it’s important to first determine what liability risks volunteers can encounter. Three volunteer liabilities that can have a lasting impact on a nonprofit include: 

• Direct Liability: This is when the organization’s or a volunteer’s action or failure to act results in harm – such as neglecting to perform a background check or providing unsafe tools.
• Indirect Liability: This includes when the organization is liable for the action of a volunteer – including damaging town property or injury to another when performing nonprofit duties.
• Strict Liability: This type of liability is when there is no need to determine negligence, as the responsibility for the damages or harm can automatically be attributed to the volunteer. 

Furthermore, volunteers may be specifically targeted by a lawsuit if they are claimed to have performed wrongful employment practices, fraud, embezzlement, and other breaches of their duties.  

What Types of Policies Can Provide Appropriate Coverage for Volunteers? 

Nonprofit organizations typically benefit from broad forms of coverage. They want to ensure volunteers have a proper defense in the event of a lawsuit and that the organization is protected from any damages caused by a volunteer. However, nonprofits can also benefit from the personal insurance their volunteers carry. Some of these policies include the following: 

HOMEOWNERS' or RENTERS' Insurance 

Volunteers who are homeowners can take advantage of their existing homeowners or renters policy. Some policies will automatically provide coverage for volunteer activities without the need for any action. Those policies that don’t provide coverage for volunteer activities typically have an endorsement option. Though policies will not cover damages resulting from wrongful acts, they may cover property damage, bodily injury, and sometimes personal injury – such as slander, defamation, or libel – especially if the volunteer has umbrella insurance. 

Volunteer Liability Insurance 

If a volunteer doesn’t have the privilege of relying on their homeowners' policy, the nonprofit can invest in volunteer liability coverage. This is typically packaged with volunteer accident insurance, where a designated amount of damages will be covered for personal and automobile liability. If your volunteer holds a position with high responsibility, a directors and officers liability policy is recommended. However, exclusions may include miscommunication of the volunteer’s duties by the organization and damages to property owned by or in the care of the volunteer.  

Personal Auto Liability Insurance 

If a volunteer is driving their vehicle while performing services for the nonprofit, it’s important to review their auto insurance. Whereas you might require commercial auto insurance if you’re a paid employee, Oftentimes, auto policies will extend their liability coverage to include protection for volunteers of nonprofits. However, sometimes a volunteer’s auto policy is not adequate to cover the cost of the potential damages, so a nonprofit may wish to invest in non-owned auto insurance. 

Determining whether a nonprofit organization needs coverage for volunteers sometimes depends on the insurance policies the volunteers hold themselves. If you run a nonprofit, encourage your volunteers to speak to their insurance agent to find out if they have appropriate coverage to protect them from any potential liability. Otherwise, contact World Insurance Associates to outfit you with the appropriate coverage to protect your nonprofit, so you can focus on your mission.

This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.