Are Volunteers Covered Under Workers Compensation or Liability Policy?

Posted in: Commercial Insurance, Risk Management Consulting

Volunteers are an incredible asset to countless organizations and businesses, from schools and non-profits to eldercare centers and hospitals. According to the latest study by the Corporation for National and Community Service, about 77.34 million people volunteered through an organization last year. The cost-savings of using volunteers are substantial, adding up to an estimated value of $24.20 per volunteer hour, a recent study by Independent Sector found.

Did you know, though, that many businesses overlook an important question about working with volunteers?

Who pays the medical bills if a volunteer gets hurt?

Injuries to volunteers might not happen every day, but they do happen, especially in higher-risk workplaces like nursing homes, eldercare centers, and healthcare centers or in areas that involve activities like disaster relief, dining services, or running errands. Many business owners assume volunteers are covered under workers’ compensation or general liability insurance. Yet for the majority, that’s not the case.

How can you figure out if your volunteers are, in fact, protected? What steps can you take to protect them in the event of an accident or injury?

Don’t assume you have coverage under your workers compensation for volunteers.
When volunteers get hurt, owners and operators tend to think workers’ compensation insurance will pay for the medical expenses. The reality, however, is that since volunteers are not paid employees, they’re typically not covered under workers’ comp in most states or by most insurers.

Some companies add a voluntary compensation endorsement to their policies, without realizing that this only covers employees who are not covered by the workers compensation law, such as employees traveling overseas, domestic or farm workers, or sole proprietors or partners. Despite the misleading title, voluntary compensation endorsements do not cover volunteers.

Unfortunately, many companies don’t realize their volunteers aren’t covered until an injury occurs. And at that point, it’s too late. Don’t let that happen to you – be proactive and ask your insurance broker these workers’ comp. related questions:

  • Do I have coverage under my workers compensation for volunteers?
  • If they are covered, then to what extent? Where in the policy is coverage identified?
  • If not, what are my options for adding coverage?

Know how your state’s workers’ comp regulations apply to volunteers.
States treat volunteers and paid employees differently, and for that reason, the workers’ compensation law for a given state and insurer policies must be reviewed carefully to determine whether a volunteer qualifies.

If a volunteer gets hurt while performing assigned tasks at your facility and needs medical attention, who will pay for the medical bills? The volunteer is not an employee, and the medical payments coverage under the general liability policy is likely not to pay.

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Understand what’s covered under general liability insurance.
Standard wording in general liability policies includes volunteers under the definition of an insured. What this means, though, is often misunderstood. If the volunteer causes an injury or property damage to a resident, patient, or visitor, the general liability policy would treat the volunteer as an insured and provide protection for claims made against them by those third parties. However, as an insured, the volunteer cannot make a negligence claim against another insured (i.e., the company). The volunteer also cannot typically collect benefits under the medical payments coverage available to third parties.

Again, if you work with volunteers, ask these general liability insurance related questions from your broker to get clarity:

  • If a negligence claim is brought against them by a third party, are my volunteers protected under my general liability policy?
  • How will my volunteers’ medical expenses be paid if they are injured while volunteering?
  • What are my options for covering my volunteers’ medical expenses?

Find out if your volunteers have coverage elsewhere.
Many businesses work with unpaid student interns participating in a school approved internship, but who may or may not be covered by the school. Before you bring student interns on board, ask the educational institution whether coverage is provided if the intern gets hurt while volunteering — or causes someone else to get hurt. If the school is providing coverage, ask for evidence in the form of a certificate of insurance. Also make sure you understand the legalities of hiring unpaid interns. They’ve changed over the years, and new rules apply.

In many cases, the only coverage available to volunteer workers for accidents or injuries is the coverage their own insurance policies provide. These could be a personal auto policy or health insurance plans. Talk to them about the situation and encourage them to look into what’s covered on their own plans in the event of an injury. This will go a long way in building trust and demonstrating your concern for their well-being.

Explore your company’s coverage options.   
If you work with volunteers on a regular basis, you likely value their contributions and want to protect them. But what are your options?

If your state or insurer covers volunteers under workers’ comp, then it’s a matter of determining whether the coverage has been endorsed to your policy.

If your state does not permit workers comp insurance to cover volunteer workers, then talk to your insurance broker about adding a volunteer-accident medical insurance policy designed specifically to pay the medical bills (or deductibles and co-pays if otherwise covered under another plan) if injured in their capacity as volunteers.

Another option to consider is having volunteers sign waivers and hold-harmless agreements so that they realize up front that you are not providing coverage, and agree to assume the risks themselves by obtaining their own or utilizing existing coverage. While this isn’t the approach most charitable organizations want to take, it may be the most prudent and cost effective.

Volunteers commit endless amounts of time, talent, efforts, and connections to a broad range of businesses and organizations. As such, they’re an important, special resource worth taking care of and protecting.

Weighing the options and determining the best fit for you isn’t easy. If you have questions or would like to learn more, my team of workers’ comp and liability insurance experts is here to help. Reach out to me at FGiachini@psafinancial.com.