Are Volunteers Covered Under Workers’ Compensation?

Topics: Workers' Compensation

The short answer – it depends. Several factors, including the organization’s location and how long it retains its volunteers, can be determining factors. Laws vary by state, however, and a number of them do not allow workers’ compensation insurance to include volunteers under its coverage.

The nonprofit sector, in particular, is most impacted by the answer to this question. The insurance needs of nonprofits are different from a standard for-profit business. Whether formed for educational, research, religious or charitable activities, organizations like these often rely on volunteers to help reach their goals.

group of volunteer workers

Earlier this year, Insurance Business America published an article featuring AmTrust’s Senior Vice President and Workers’ Compensation Product Manager, Matt Zender. The topic of conversation involved volunteers, nonprofits and workers’ comp coverage.

“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,” Zender said.

A unique challenge when it comes to nonprofits and workers’ comp insurance is what Zender refers to as “class creep.” 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.

“The risk might start off looking like one type of operation, and then over the course of time, maybe within that policy year, they move into other areas. You might have an operation, for example, that is struggling for funding – and obviously funding is a major concern for nonprofit risks – and maybe they’re working on a grant,” explained Zender. “They find that they have an opportunity to do something that is substantially similar to what they were doing before and allows them to perhaps secure some additional funding to help them with their core overall objectives. When you have class creep like that, or you move from one type of an operation into another, people who are more familiar with underwriting nonprofit risks know how to look out for that, and how to help those risks when they go through a premium audit to make sure that everything is properly addressed.”

If your organization operates in a state that doesn’t allow coverage of volunteers under a workers’ comp policy, there is another option to make sure you have coverage.

“One of the things that we prefer to do when at all possible is to coordinate with a General Liability policy, so they’ve got an ability to help remove some of the gray areas about whether or not those individuals would be covered,” Zender explained.

Whether it’s with workers’ compensation, general liability or both, it’s of the utmost importance for an organization to have coverage in place, as you can be held liable if a volunteer suffers an injury while on the job.

If your organization is located in a state that does extend your workers’ compensation policy to cover volunteer workers, be prepared to offer up details to your insurance carrier’s underwriters about the number of hours worked, the type of work performed and specifics such as the age range of your volunteers. Keep in mind that adding volunteers under your policy could increase your insurance premiums.

AmTrust Financial is Your Insurance Solution

AmTrust Financial provides a wide range of insurance solutions, including those specifically tailored to the needs of nonprofit organizations, such as property, general, professional, management, BOP or workers’ compensation. Find out more about nonprofit coverage by reading our blog post, “Nonprofit Deep Dive - Understanding Our Coverage” as well as “Unique Workers' Comp Challenges Facing Nonprofits.”

If your organization utilizes the help of volunteer workers, we can help you determine what policy you need to make sure they’re covered. For more information, reach out to your AmTrust appointed agent or contact us today.

This material is for informational purposes only. 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 your local RSM for more information.

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