Volunteers and General Liability Insurance

If you are a nonprofit, you most likely depend on the kindness of volunteers to make your organization strong.

I personally sit on the board of small nonprofit. I sometimes help teach children at my church. I give to a few organizations.  It’s important to know how those to whom I’m offering my time and resources have me covered from an insurance perspective.  I’d probably do what I do anyway, but it’s comforting to know there’s coverage.

Excerpted from Insurance Servics Office, Inc. 2012 - CG 00 01 04 13

Excerpted from Insurance Servics Office, Inc. 2012 – CG 00 01 04 13

I’ve written an overview before about Volunteers and Nonprofit Insurance, but here I’d like to dive deeper into the specific provisions of a General Liability (GL) policy as it relates to volunteer workers.

Volunteers actually have some additional benefit that other insureds under the GL policy do not have.

Volunteers and the Two-Pronged Coverage of a General Liability Policy

Here you go…. A General Liability (without any pesky limiting endorsements) will both…

  1. …defend a volunteer if named in a covered claim or lawsuit and
  2. provide some coverage if a volunteer is injured (again, assuming all other conditions of the policy are met).
Coverage for a Volunteer Named in a Lawsuit

The key to understanding who is insured under a policy is finding and reading the ‘Who Is Insured’ paragraphs. This section will lay out pretty clearly (once you get used to the contractual language) which categories of people have coverage under the policy.

In a GL policy, the folks who ‘have coverage’ are those who might be defended or who might have a claim payment made on their behalf. The covered party is NOT the injured party.

So, back to the policy and “Who Is Insured” (Section II in the CG00010413 standard General Liability Policy, Copyright Insurance Services Office, Inc, 2012).

Paragraph 2.a. under “Who Is an Insured” says the following:

Your “volunteer workers” only while performing duties related to the conduct of your business, or your “employees”, other than either your “executive officers” (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. (emphasis added)

The policy goes on and describes some details, but the long and short of it is this:  volunteers have coverage under an organization’s General Liability policy.

A volunteer has similar coverage under the policy as an employee of the same organization would have.

Coverage for Medical Payments for a Volunteer

While volunteers have similar coverage as ’employees’ under the main provisions of a General Liability policy, volunteers’ coverage under ‘Coverage C – Medical Payments’ is different.

Employee injuries are always excluded under the General Liability policy. Under the ‘Medical Payments’ section, all insureds are excluded from having their accidental ‘bodily injury’ expenses paid for…. except ‘volunteer workers’.

Here’s how the policy reads (I’m including the insuring agreement so you know how the coverage works, but look closely at bullet point 2 – where the exclusions start):

COVERAGE C – MEDICAL PAYMENTS
1. Insuring Agreement
a. We will pay medical expenses as described below for “bodily injury” caused by an accident:
(1) On premises you own or rent;
(2) On ways next to premises you own or rent; or
(3) Because of your operations;
provided that:
(a) The accident takes place in the “coverage territory” and during the policy period;
(b) The expenses are incurred and reported to us within one year of the date of the accident; and
(c) The injured person submits to examination, at our expense, by physicians of our choice as often as we reasonably require.
b. We will make these payments regardless of fault. These payments will not exceed the applicable limit of insurance. We will pay reasonable expenses for:
(1) First aid administered at the time of an accident;
(2) Necessary medical, surgical, X-ray and dental services, including prosthetic devices; and
(3) Necessary ambulance, hospital, professional nursing and funeral services.

2. Exclusions
     We will not pay expenses for “bodily injury”:
a. Any Insured
      To any insured, except “volunteer workers” (emphasis added)

There you have it. The policy allows for medical expenses to be paid for volunteer workers.

The policy excludes payment on behalf of all insureds, except volunteer workers.

Technically, the coverage is still for the organization since it’s the organization’s funds that are being protected. Volunteer workers are simply allowed to be claimants under this section.

‘Coverage’ is a tricky word, but in layman’s terms and vernacular, yes, the volunteer worker has some coverage for their injuries.

The dollar limit for this coverage is typically between $5,000 and $20,000.

A Note about Volunteer Injuries

We’ll discuss this more completely elsewhere, but while volunteer injuries can be covered under the General Liability policy, it is not the best option for organizations with a heavy volunteer worker contingent. You’ll want a Volunteer Accident Policy to give you additional limit, a wider range of coverages, and a buffer from using up your General Liability limits for volunteers.

A Word of Warning: General Liability Endorsements

All of the preceding description of coverage is based on an unendorsed General Liability policy. An insurance endorsement is simply an amendment to the standard policy.

There are always a few amendments attached to a policy. Some endorsements give coverage. Some take coverage away. Some limit coverage.

In the world of nonprofit insurance as it relates to volunteers, you want to review your policy or a quote proposal for any endorsements related to volunteers or volunteer workers. Some of these will limit coverage related to volunteers (excluding them from Medical Payments coverage or excluding them as ‘insureds’ under the main portions of the GL policy).

So just be aware that they are there and review them and discuss with your agent if anything sticks out.

Summary and Next Steps

To summarize, volunteers have coverage if they cause injury, and they might have access to funds if they accidentally get hurt while working for your organization, assuming all other conditions of the policy are met.

The long and short is this: Your General Liability policy is generous to your volunteer workers.

As a nonprofit leader, I’d use this information as follows:

  1. Review your policy for any volunteer-related endorsements.
  2. Discuss any of these endorsements with your insurance agent.
  3. Once you’re clear on your policy’s coverage, make any adjustments.
  4. Discuss the pros and cons of relying on the Medical Payments line item for volunteer injuries vs. purchasing a Volunteer Accident Policy.
  5. Consider how your insurance program can be used as a volunteer recruitment tool. Some nonprofits don’t want volunteers to ‘get any ideas’, but your policy could be a very useful tool in recruiting key volunteers. We’ll discover that similar coverage is also present under the Professional Liability and Abuse and Molestation Liability policies, too.
Questions and Discussion
  • Do you have a volunteer-related claim story  you’d like to share?
  • How vital to you are your volunteers and how have you built risk management practices around your volunteer exposures?

(Please respond in the comments below).

Note and Disclaimer: Remember that your situation is unique. Make sure to have a licensed professional review your situation and offer specific recommendations. Content here is general and each policy package varies.

Comments

  1. It is always a good idea to talk with a trusted insurance agent to discuss your liability insurance needs. That way you do not get surprised when the unexpected happens and your basic coverage does not cover your losses. Thanks for this post!

  2. Allen Johnson says:

    I was volunteering for my HOA when I fell while running away from an aggressive dog. My HOA didn’t carry Work Comp or have me sign a waiver. In small claims CT I argued that the HOA has primary liability for medical payments resulting from injuries to volunteers, regardless who caused the injury (no fault). I’m still awaiting the court decision.
    Was I correct? The judge wasn’t certain.

    • Brett Cohrs says:

      That’s a tough one. Your situation is why I’d always suggest an HOA have general liability that includes Med pay for volunteers or a dedicated volunteer accident policy.

      Your statement is saying that they owe you though they aren’t at fault. Normally, a civil suit requires some sort of negligence on the part of the plaintiff (not an attorney but an educated opinion).

      It doesn’t seem the HOA was negligent in this situation. Did they have a fiduciary duty to have that coverage in place? That’s a tough one.

      I’d sue the dog’s owner. Negligence on their part.

Trackbacks

  1. […] General liability will always have a professional services exclusion. And often, with nonprofits, there will be an additional exclusionary endorsement (i.e. an additional form slapped on to the back of the policy) to exclude claims that could be the result of ‘professional services.’ […]

  2. […] liability policy, the most common kind of insurance for nonprofit organizations, typically provides very modest “Medical Payments” coverage of $5,000 to $20,000 for injuries incurred by volunteers. But the occasional CGL policy adds an […]

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