Are Unpaid Volunteers Covered by Workers Compensation?
If you are the owner or operator of a nonprofit, your organization probably relies heavily on unpaid volunteers. According to the Corporation for National Community Service, about 25 percent of Americans volunteer an average of 33 hours of their time each year, which amounts to about 8 billion hours of service annually. That’s the equivalent of about $184 billion a year.
Obviously, volunteers are vital to the American economy and to the mission of the approximately 1.5 million nonprofits registered in the United States. Unpaid volunteers perform a wide assortment of duties, including education and support, clerical tasks, and more hands-on duties such as cooking, cleaning, mechanical repairs, animal handling and more. Without volunteers, many hospices, nursing homes, hospitals, animal rescues, youth organizations and homeless shelters would be hard pressed to provide any level of service to the communities they serve.
Yet despite the value they provide to their communities and their employers, because they are not legally “employees” in most states, unpaid volunteers are not covered by workers compensation insurance. What’s more, many nonprofits don’t realize this until they are faced with a situation in which a volunteer is injured while at work.
Insurance and Unpaid Volunteers
In some instances, unpaid volunteers are insured by a nonprofit’s general liability insurance. This means that, should a volunteer cause property damage or a third-party injury, the nonprofit’s liability policy will pay to repair or replace the damaged property or cover the injured party’s medical bills. Let’s say, for example, that an unpaid volunteer at an animal shelter is walking a dog in a public area, and the dog breaks free and bites a passerby. In that instance, the animal shelter’s general liability insurance would cover the injured person’s medical bills. But if the animal were to bite the volunteer, the general liability policy would most likely not cover their medical care.
Similarly, a volunteer who is injured at work is generally not eligible for worker’s comp. Thus, in the above scenario, the injured volunteer would be responsible for paying their own medical bills. Furthermore, in most cases, they would legally permitted to sue the organization to recoup those costs.
Many nonprofits seek to limit their exposure in cases of volunteer injuries by requiring volunteers to sign a waiver of liability. These documents expressly inform unpaid volunteers that they assume all risks associated with the duties they perform, including medical costs associated with any on-the-job injury. Unfortunately for most nonprofits, many of these so-called hold-harmless agreements are worded so broadly that they rarely hold up in court.
Still, liability waivers can perform an important function, especially if the organization makes the effort to tailor them to the risks its volunteers may face. Most people who enter volunteer service do so for altruistic reasons and rarely think about the possibility that they may be involved in an activity that could cause them harm. Thus, by spelling out potential hazards, the organization not only protects itself financially, it also educates potential volunteers as to the risks they may face.
Generally speaking, waivers of liability should be executed in conjunction with an in-person orientation in which an employee of the nonprofit discusses the organization’s mission, values and the specific duties unpaid volunteers may be asked to perform. If there are a number of different volunteer functions available, these should be covered in separate sessions to ensure that the information the orientees receive is appropriate for the duties they will be assigned to complete. During these sessions, an employee of the organization can go over specific risks the volunteers may encounter; answer questions; review safety protocols and — at the end of the session — ask the volunteers to sign the waiver. Hold-harmless agreements executed in this way are more likely to help prevent lawsuits by educating volunteers appropriately. They are also likely to be viewed more favorably by the courts.
The Carmoon Group, Ltd. is a family owned insurance broker headquartered in Hicksville, New York. Through our large nationwide network of insurance associates, we offer a broad range of risk management products to businesses of all types, including for-profit businesses and nonprofit organizations across the United States. Our experienced professionals are available every weekday to review your current coverage and answer any questions you may have. Just give us a call to set up an appointment, or reach out online and we’ll get back to you at a convenient time.