Nonprofit organizations are known for helping those in need and giving back to their communities in a variety of ways. Whether formed for educational, research, religious or charitable activities, these tax-exempt groups often rely on volunteers to assist in carrying out their mission. However, when it comes to considering
insurance for nonprofits, it’s important to remember that even though these volunteers are not paid employees, nonprofits still need to carry
workers’ compensation insurance.
Nonprofit Workers’ Compensation Challenges
There’s no doubt that when it comes to insurance, and specifically workers’ compensation coverage, the needs of nonprofits are different than a standard for-profit business. This mainly has to do with the employment status of the volunteers. AmTrust’s Matt Zender, SVP and Workers’ Compensation Product Manager recently contributed to an article on this subject in Insurance Business America.
According to Zender, “The ways that volunteers are perceived varies widely by state. One state may recognize a volunteer as an employee who could get workers’ comp coverage. Another state would say ‘no,’ volunteers are definitely not covered by workers’ comp. One of the things that we prefer to do when at all possible is to coordinate with a General Liability (GL) policy, so they’ve got an ability to help remove some of the gray areas about whether or not those individuals would be covered.”
Additionally, another unique challenge when it comes to workers' compensation for nonprofits is what Zender refers to as “class creep.” In other words, due to the ever-changing nature of the nonprofit sector, the types of risk can vary as time goes on as the organization moves from one type of operation to another. It’s vital that nonprofits select an insurance carrier who specializes in these unique risks.
Learn more by reading the entire
Insurance Business America article.
Nonprofit Workers’ Compensation from AmTrust Financial
AmTrust Financial provides all lines of insurance coverage specifically tailored to the needs of
nonprofit organizations, including property, general, professional, management, BOP, workers’ compensation and more. For more information about our nonprofit insurance, please
contact us today.
This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact with your local RSM for more information.