Keep Your Volunteers Covered

By: Jennifer J. Salopek

The power of collaboration is in action every day at associations, as they gather and direct the work of legions of volunteers. But working with so many volunteers in a wide variety of roles leads to a unique set of risks. With solid risk-management methods and the right insurance coverage, you can make sure your association is ready should a volunteer problem arise.

For many associations and nonprofits, the work of volunteers is essential. They help provide critical programs and services and extend their organizations' reach exponentially. Many associations would even say the value of their volunteers is incalculable. An association simply isn't an association without the work of its volunteers.

But the nature of that work also carries a unique set of risks for an association, different from those that arise from the employment of paid staff. Volunteers come with different backgrounds and skill levels, and associations have less opportunity to select and train volunteers than they do staff, all of which makes for a lot of uncertainty. As an association executive, how can you minimize these risks and ensure that you have sufficient insurance coverage to protect the organization against volunteer-related problems?

As with most challenges facing an association executive, there is no one magic answer, says Melanie Herman, executive director of the Nonprofit Risk Management Center. "There will never be enough information to identify the risks [associations] face today; it's a moving target," she says. So how do you cope? "Learn from the past and plan for the future."

Risk and Reward

Herman, author of No Surprises: Harmonizing Risk and Reward in Volunteer Management, says that risks fall into three major categories:

  • claims of volunteer negligence or wrongdoing
  • claims related to volunteer injury
  • claims from unhappy volunteers

That last area is not to be underestimated. "Thirty years ago, the potential damage from an unhappy volunteer was limited to that person talking to their family and friends," Herman says. "Now, with social media, that person can set off a flash crisis that can cause significant difficulties for associations."

Effective communication is key to mitigating all three types of risk. To lessen the chances of volunteer negligence or wrongdoing—and to protect your association against claims—think carefully about how you engage volunteers. What do they do? How do they do it? Are they sufficiently trained and supervised? Clearly communicate tasks and responsibilities to volunteers; written job descriptions and agreements on expectations can be helpful, Herman says.

Kathy Weinheimer, senior vice president for industry relations and education at the Independent Insurance Agents Association of New York, Inc. (IIAANY), agrees. Her organization asks all volunteers to sign a statement that they have read and understand all policies and coverage.

Like many associations, IIAANY conducts formal orientations for new volunteers and board members and provides extensive written documentation.

The best way to protect your association against claims from unhappy volunteers is to pay close attention and manage volunteer discontent proactively. Ensure that there is a feedback loop and provide plenty of outlets for volunteers to express discontent. "Don't create barriers. Rather, welcome complaints and commit to looking into them," says Herman. "Often, the complaint isn't the real heart of the matter. You could miss the opportunity to learn about bigger issues."

Associations can be held liable for the actions of their volunteers. "It is a 'master-servant' relationship," says Leslie White, principal of Croydon Consulting LLC and a 20-year veteran of the insurance industry. "The volunteer is acting as an agent of the association."

"The risks are very similar to those with employees," says Ron Taylor, a partner with Venable LLC. "A prudent association will ensure that it has appropriate protection."

"The association will usually be named in a lawsuit because the claimant will go after [the organization's] deeper pockets," says Eric Johnson, assistant vice president of Aon Affinity Insurance Services.

William Coady, a broker with Walterry Insurance, puts it more colorfully: "I don't sell insurance. I tell horror stories."

Coady supplies two examples of cases in which associations were sued over the alleged negligent actions of volunteers. In the first case, an association hired a bus company to take people from its annual conference location to a theater for a performance. A volunteer was helping people board, and an attendee slipped on the steps and hit her head. In the second case, a volunteer was helping set up an association tradeshow and dropped a light bar that struck another person on the head.

Volunteers receive some blanket protections under federal and state legislation. The federal Volunteer Protection Act, passed by Congress in 1997, shields volunteers from personal liability for harm, provided that their involvement meets certain requirements. One key exclusion of this protection, however, is a volunteer operating "a motor vehicle, vessel, aircraft, or other vehicle."

Asking volunteers to drive on association business is one of the riskiest things you can do, says White. "There is only a short distance between a fender bender and a major crash," she says, and automotive liability typically is excluded from commercial general liability policies.

Volunteers themselves often assume some risk of harm when working on behalf of your association. Are there situations in which you might ask volunteers to sign liability waivers? They are often appropriate for activities that involve physical risks, says White. Some examples might be athletic events, home renovation, warehouse work, and work involving animals or at-risk populations. The waiver should be reasonable, says Taylor, but it likely will not deter volunteers. "People who want to volunteer are often willing to sign," he says.

"As a risk manager, I think that one of the tenets of risk management is that responsibility lies with the party best able to manage and mitigate risk and provide a safe experience for volunteers," says Herman. "Rather than trying to transfer responsibility, organizations should think about risks and plan accordingly."

Multiple Insurance Policies

Associations can obtain several different types of insurance policies to provide coverage against risks incurred by and around volunteers:

Directors' and officers' liability. A D&O policy protects the association against "wrongful acts" committed by employees and volunteers, such as the mismanagement of funds. It also protects volunteers from personal liability in claims of wrongful acts while acting on behalf of the association; in other words, their personal assets are not at risk. The D&O policy should specifically include volunteers, but due to usual "omnibus wording," there is no need to list volunteers by name, says Aon's Johnson.

"The challenge is that there is no such thing as a standard policy," says Weinheimer. Ensure that the policy includes sufficient limits and a reasonable deductible, and check exclusions carefully: "There are many nuances of coverage based on association activities, but you can probably be successful negotiating those exclusions," she says. For instance, Weinheimer says that IIAANY's new insurance carrier attempted to exclude anything related to the association's political activities.

D&O policies also usually include employment practices liability coverage, which protects the organization against claims of wrongful termination, discrimination, and harassment. Adding third-party protection covers the association against claims made by members or customers about misbehavior on the part of employees or volunteers, says White.

Complaints from unhappy volunteers "are more commonly around the volunteer's perception of unequal treatment," says Taylor. The best way to mitigate that risk is to ensure that volunteers aren't inadvertently being treated as employees. For example, if volunteers receive stipends or other financial benefits, this could expose your association to additional risk. "Courts usually ignore the label of 'volunteer' and look at the real nature of the relationship," says Taylor.

General liability. This policy protects the association against claims of bodily injury, property damage, or personal injury, such as libel, slander, or copyright or trademark infringement occurring in advertising or other communication. Again, ensure that volunteers are included as covered, White notes.

Workers' compensation. Statutory coverage for workers' compensation is required by every state for any organization that has employees, usually at least three, and it covers those employees if they are injured on the job. Some states have extended that mandate to volunteers; others permit extending the coverage to volunteers even if not mandated. Employers' liability insurance covers the organization if it is sued over a bodily injury incident, says White.

Automobile liability. Remember that insurance follows the vehicle, not the driver, says White. Automotive liability insurance protects the association, not the volunteer. IIAANY provides travel insurance to its volunteers, which includes accident coverage and a death benefit for volunteers driving locally and traveling domestically on association business. "We choose to do this for our volunteers, seeing it as a nice benefit to provide," says Weinheimer.

Media liability. This coverage is important if your association generates extensive content, social media participation, and publications, White says. A separate, fairly expensive policy, it protects the organization against claims of libel, slander, defamation, copyright or trademark infringement, and "negligent publication." Ensure that the policy covers volunteer authors.

Associations can also be liable for the social media activities of their employees and volunteers. Ensure that your media liability policy has an endorsement that broadens coverage to third-party sites such as LinkedIn and YouTube, White says. Coady notes that there is a new product specifically designed to cover web content, known as "cyberliability" insurance.

Professional liability. Many associations are involved in standard-setting and certification programs. Also known as errors and omissions insurance, professional liability policies protect associations against claims arising from incorrect or incomplete information. The American Speech-Language-Hearing Association (ASHA) is working on getting new coverage related to its giving of medical practice advice, says Yvonne Kankam-Boadu, director of finance. "Although we are not performing treatment, it is similar to malpractice insurance," she says.

Other types of specialty policies your organization might require to cover volunteer-related risks include coverage for special events—such as tournaments, fun runs, or shooting competitions— and "crime policies," useful for small organizations such as homeowners' associations in which all funds are managed by volunteers.

The $64,000 Question Or Much More

How much coverage do you need? That is the $64,000 question, experts agree. "We try to make decisions [about coverage amounts] based on historical trends, but we may not have had certain types of claims," says Kankam-Boadu. "You must balance risk coverage against lower premiums. At ASHA, we tend to opt for high amounts of coverage."

"That's one of the most difficult questions we get," says Johnson. "It's easier to answer on the property side, and workers' comp formulas are based on numbers, but D&O is much more difficult." Although he prefers not to advise on coverage amounts, Johnson notes that Aon offers benchmarking information that may be useful.

White suggests minimum coverage of $1 million each for general liability and automobile liability and about $200,000 for travel accident coverage. Weinheimer says that D&O coverage is usually for $5 million to $10 million. "It must be a thoughtful decision based on the association's assets," she says.

All of the sources consulted for this article agree that it is crucial to get professional help from a qualified insurance consultant, broker, or agent. Open communication on your part is key; advise your counselors candidly about the association's risks and exposures.

Remember that no matter how proactive your risk assessment measures and no matter how extensive your insurance coverage, you can't entirely preclude lawsuits. "Insurance is simply a form of recovery," says Herman. Keep in mind also, says Coady, that the costs of defending a suit can erode the amount left for settlement. Ensure that volunteers are covered with defense costs outside of coverage limits, as well.

Jennifer J. Salopek is a freelance writer based in McLean, Virginia. Email: [email protected]

Jennifer J. Salopek