How to Evaluate the Benefits of Insuring Nonprofit Volunteers
Typically, nonprofit organizations carry liability and property insurance. Almost all states require that workers’ compensation insurance be in place to cover on-the-job injuries to employees (but not necessarily volunteers). Beyond this basic insurance, coverage depends on the type of services provided and the degree of risk involved.
Keep in mind that volunteers usually aren’t liable for their actions as long as they work within the scope of the volunteer activity to which they have been assigned, perform as any reasonable person would perform, and avoid engaging in criminal activity.
Unfortunately, people these days have become more eager to file lawsuits. If someone sues you or one of your volunteers, you have to legally defend the case even if it’s without merit. One advantage of having liability insurance is that your insurance carrier takes on the responsibility of defending the suit.
Workers’ compensation may or may not be available to volunteers in your state. If you can include volunteers under your state law, consider doing so, because a workers’ comp claim usually precludes the volunteer from filing a suit for damages against your organization. Plus, you want your volunteer to be covered if he sustains an injury.
Insuring volunteers is a subject of debate in the nonprofit sector. Some people take the position that insurance agents and brokers try to convince you to insure anything and everything. Others believe that liability insurance and, in some cases, workers’ compensation insurance should be provided.
As is the case with all insurance questions, evaluate your risks and decide whether the cost of insuring against risks is a good investment. This process is called risk management. To find information about risk management for nonprofit organizations, contact the Nonprofit Risk Management Center.