Does nonprofit insurance protect your volunteers?

Martin Luther King, Jr.'s January birthday is a federal holiday honoring his life, but it has also evolved into a day of service. People across the country will honor King's legacy by volunteering their time to give back to the community as part of United We Serve, President Obama's nationwide service initiative.

If you run a nonprofit, it can be gratifying to receive this annual influx of volunteers. But before you start handing your volunteers clipboards and T-shirts, you may want to review your nonprofit insurance to find out if it also provides liability protection for them.

Do I need to cover volunteers on my nonprofit liability insurance?

When you purchased nonprofit insurance, you no doubt made sure it provided coverage for your organization and its employees. But did you check to see if that same protection extends to your volunteers? If not, you may want to talk to your insurance agent. If something goes wrong while a volunteer is working for your organization, you will want to make sure they, and your nonprofit, have the appropriate protection.

Before volunteers walk in your door, talk to your agent about adding them as additional insureds to your nonprofit liability insurance. This way you are protected in case a volunteer:

• Is injured
• Causes accidental property damage or injury to a third party
• Sues your nonprofit over an injury they received while volunteering
• Acts inappropriately, causing a third party to sue your organization

Make sure you work with an insurance agent who has experience working with nonprofits – they will know which policies to tweak and what options you have.

Should I include volunteers on all my nonprofit insurance policies?

That really depends on what kind of work volunteers perform at your organization. Let's take a look at a few situations when it might make sense to extend your liability coverage to include volunteers.

Your volunteers repair homes for elderly homeowners. While moving a ladder, a volunteer accidentally slams it into one of the home's windows, shattering it. You can never predict when an accident might happen, so it might make sense to cover volunteers working in the community under your general liability insurance. This policy addresses the costs associated with accidental injuries or property damage. That way, the damaged cause by your volunteer would be covered.

Your volunteers manage your social media accounts. It's great to have the extra help, but your organization could also be liable for the volunteer's actions. For example, a well-meaning volunteer took some photos at an event and posted them on your nonprofit's Facebook and Instagram accounts. You didn't have the event participants sign photo release forms, so one of the photographed folks sues your organization for using their image without their consent. General liability insurance may handle the legal expenses.

Your volunteers handle your tech. One of your IT-savvy volunteers helps you set up an online portal so donors can contribute easily through your website. Make sure she and anyone else who works with your customers' data is covered under your cyber insurance. That way if hackers strike and make off with sensitive donor information, such as email addresses or credit card numbers, you have lawsuit protection.

You don't necessarily need to add every volunteer as an additional insured to each nonprofit liability insurance policy. However, depending on the nature of your organization and the type of work your volunteers perform, some policy adjustments may make sense.

Do I need to add volunteers to my workers' compensation insurance?

The ground rules regarding workers' compensation insurance are decided at the state level. This means you will need to check the guidelines in your state to determine whether you need to purchase coverage for your volunteers – if volunteers are even eligible. In many cases, they won't be, because workers' comp is meant to cover paid employees, not volunteers, according to PropertyCasulty360. Even if you are able to offer workers' comp, it may be too expensive for your organization to extend this coverage to every volunteer.

General liability insurance may not cover the expenses for an injured volunteer either. It is designed to cover injuries suffered by third parties, not people working for your company. For a short-term volunteer, your insurance company may cover the expense. But if the person is a frequent volunteer, it may not.

That means if one of your volunteers is hurt, they could be forced to pay their own medical bills. Obviously you don't want your volunteers to take a financial risk on your behalf, so how do you protect them?

One option is to purchase a volunteer-accident medical insurance policy. It typically costs less than workers' compensation insurance and may be your only option in states that don't allow workers' comp benefits for volunteers.

Again, the best way to make sure have the right coverage for your volunteers is to talk to your insurance agent. They can help explain the laws in your state regarding coverage for volunteers and how to best protect them without taking on additional costs that your nonprofit may not be able to afford. For more information, check out our article "When nonprofits need workers' compensation insurance for volunteers."

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