Friday, June 12, 2009

Don't "Volunteer" for trouble!

Volunteering is as American as apple pie. Whether its staffing the rummage sale at church, coaching kids on the baseball team, or serving on the board of the United Way, most of us genuinely like to jump in an lend a hand. It is one of the features of this country that makes us great, but of course it also presents some challenges from an insurance coverage standpoint should something bad come out of it.

Unfortunately one of the negatives of living in this country is the litigiousness of our society. A seemingly innocuous stint as a basketball coach for the local recreation program can turn into nightmare claims scenario when a child suffers a severe head injury during a practice; or, while you’re a serving as a board member for a local not for profit and are personally sued because of a management decision the board made. Sadly these scenarios are not as rare as they may seem, and the time to investigate coverage is before they occur.

Let’s examine where we would likely find coverage, if any, for our activities as volunteers. The first place one might look is their Homeowners/Renters (HO) insurance policy. The good news is there is some coverage to be found here, the problem is it is limited. The typical HO policy will respond to the actions of an insured while functioning in his/her capacity as a volunteer (no compensation). The caveat is that they are limited to claims of liability for bodily injury and property damage only. The policy may and should be endorsed to include Personal Injury coverage (libel, slander, etc) as well.

What about claims other than bodily injury or property damage such as the second example above, a management mistake that results in a financial loss only? Here an insured might find coverage in their Personal Umbrella Policy (UMB), if they have one. This is somewhat of a precarious expectation though as there is no standardization in UMB policies, thus requiring a careful review of policy language to see if coverage is there and to what extent.

Ultimately your own personal coverage should be considered a supplement to the coverage provided by the organization you are volunteering for. Before choosing to volunteer you should be asking what if any liability coverage is in place to protect you as volunteer for the organization. Depending on the capacity under which you are serving you should be looking for the following:

  1. General Liability. This is coverage for the organization similar to your personal liability. You want to be sure they have it and that is includes you as volunteer as and insured. Thus if you are sued you can look to this policy to protect you. If the volunteering is athletic or sports related, you want to be sure the policy is covering the athletic particpants and not excluding them. If children are involved you want to be sure there is abuse or molestation coverage as well; should some sort of accusation arise during your service.
  2. Directors & Officers Liability. This is coverage to protect the organization and board members for the management of the organization. Thus if a donor or some other stakeholder sues over financial decisions made by the board you will be protected. Often times the By-laws of a not for profit will state the organization will indemnify board members for their service, but this does you little good if there is no insurance to back up the indemnification and the organizations assets are all there is. You’ll want to be sure it included Employment Practices Liability as well, to help protect against employment related claims (i.e. wrongful termination, harassment, etc).
  3. Automobile Liability. If in your duties as a volunteer you are driving vehicles owned by the organization. You want to be sure they have adequate limits of coverage and that you as a driver are covered as an insured. With respect to using your own vehicle, typically your own insurance is primary, so the burden is on you to make sure limits are adequate and the insurance company is aware of the activity. The organization may have a Non-owned automobile policy, but it will be secondary to your coverage and protect them only.

The bottom line is your own personal insurance should be secondary to the insurance coverage of the organization you are volunteering for. A little due diligence on your part in the beginning can add to the satisfaction you receive from volunteering.

After all, volunteering is a good thing and shouldn't be ruined by an unforeseen accident.

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