Nonprofit insurance coverage provides your nonprofit with risk management solutions in the event that a loss occurs. This type of specialty insurance coverage is designed to help you manage those risks specific to working in the non-profit community, particularly when it comes to managing volunteers. The need for insurance coverage for your nonprofit, particularly the type that addresses the activities of your volunteers, is an important cost of business that you can ill afford not to have in place.
According to the Foundation Center, many of the 1.5 million nonprofit organizations operating in the United States today rely on volunteers every day. According to the Internal Revenue Service (IRS), 85 percent of nonprofits operate with no paid staff and are 100 percent volunteer-driven. Volunteers receive no compensation, do not deduct the time they give to your organization and are not covered by workers’ compensation in the event that injury or accidents occur.
Given the importance of volunteer to the work you do as a charitable nonprofit, it is equally important for you to understand how to protect your organization, your team and your volunteers from loss. This includes an understanding of the risks that are specific to working with volunteers in the nonprofit universe as well as the type of training you should provide for the organization to mitigate risks and the type of insurance protection you should purchase to cover potential financial loss.
Risks Inherent to Nonprofit Organizations
It is important to understand that with many risk underwriting companies, the majority of volunteer liability that arise involves accidents, incidents and bodily injury caused by your volunteers. This is counter to the common misconception that your concern as a volunteer is of loss exposure brought on by accidents and injuries that affect your volunteers personally. This myth of the proportion of volunteer-related liability that is caused by the volunteer as opposed to against can cause you have inadequate levels of insurance coverage in place.
Limits on coverage for certain types of nonprofit insurance is a direct result of not understanding the nature of risks to your organization. Not all loss is the same or treated as such by insurance companies. It is in the best interest of your organization to have a comprehensive review performed on the type of insurance you carry for your volunteers in order to determine if the policies you have are adequate or if changes are needed in order to cover your potential liabilities.
Providing Liability Training to Staff and Volunteers
Insurance providers who offer nonprofit insurance coverage often suggest that one of the best defenses against loss is to provide comprehensive safety training. A training program that emphasizes the potential for loss and methods for reducing accidents or injuries can help lower your insurance premium costs, especially when such programs are made mandatory and are documented. Providing liability training is an essential part of your nonprofit’s risk management. Training also provides you with a liability shield in the event that you are required to face civil claims arising from the loss caused by your volunteers.
The types of training you should consider include safety training for drivers and accident prevention training. These types of training should be made available for both group settings as well as for individual refresher training. The training you offer your volunteers to reduce liability should be based on a risk assessment performed on the organization. This risk assessment can help you pinpoint those problem areas that require focus and training in order to reduce their occurrence.
Having Proper Insurance Coverage to Protect Your Nonprofit
As mentioned above, volunteers of nonprofit organizations are not compensated and do not qualify for workers’ compensation. This means you should consider the purchase of different insurance coverage that not only protects your organization from liability that arises from harm to your volunteers, but also liabilities that arise from loss caused by your volunteers. Volunteer accident policies are important to provide loss associated with medical expenses, death, or liability incurred when the volunteer is the cause of the loss to others. Increases in your nonprofit’s general liability coverage should provide for losses that result in injury or harm to the volunteer, while engaged in activities on your behalf.
The good work that your nonprofit organization engages in and the money you raise for your cause(s) can be threatened by a personal injury claim against one of your volunteers. Even though a limited liability shield is available to your organization on the federal level through the provisions of the Volunteer Protection Act of 1997, the limits on the responsibility only apply where your volunteer:
- Acted within the scope of their duties;
- The volunteer was properly qualified and/or certified to perform the duties;
- The resulting injury or harm was not the result of negligence, willful or reckless misconduct; and,
- The resulting injury or harm from the operation of a motor vehicle, vessel or aircraft was not the result of the volunteer not being in possession of a motor vehicle license or proper insurance
Have a review performed of all of your insurance coverage and put in place a program that ensures you have the correct protection in place by contacting Allied Insurance Brokers. Let our team put 15 years of experience in the non-profit industry to good use, anticipating all of your needs to make sure your organization is completely covered. When it comes to your nonprofit, don’t settle for second best. Work with the industry experts at Allied Insurance Brokers for all of your nonprofit insurance needs.
*Allied does not deem this blog entry as a complete and thorough listing or overview of the above topic, and does not recommend it be primarily relied on. It only highlights some common issues and resolutions. For a thorough overview, please contact Allied’s Risk Engineering Division.