Neil Ziegler recently spoke in a Business Insurance Comp Spotlight about workers' compensation in the nonprofit market. You can view the interview here, or learn more below.

Do volunteers quality for workers' compensation?

As nonprofits navigate ongoing funding challenges, many are relying more heavily on volunteers to keep essential programs running. While this shift helps organizations continue serving their communities, it also creates an often-overlooked insurance question: What happens if a volunteer is injured?

Many nonprofit leaders assume volunteers are automatically excluded from workers’ compensation coverage because they aren’t paid employees. In some cases, that’s true — but it’s far from a universal rule. Workers’ compensation laws vary significantly by state, and the line between a volunteer and an employee isn’t always as clear as organizations expect.

Understanding that gray area before an injury occurs can help nonprofits avoid costly disputes, protect their volunteers and ensure they have the right insurance solutions in place.

Why volunteer status isn’t always straightforward

Workers’ compensation is designed to do two things: pay for medical expenses related to a workplace injury and replace a portion of lost wages while an injured worker recovers.

Because volunteers generally don’t receive wages, many organizations assume workers’ compensation doesn’t apply. However, state laws define “employee” differently, and some states consider more than just a paycheck when determining eligibility.

In certain jurisdictions, volunteers who receive stipends, regular in-kind benefits or other forms of compensation may be considered employees for workers’ compensation purposes. Depending on the state, those benefits could include:

• Free meals

• Discounts on goods or services

• Gift cards or other incentives

• Housing or lodging

• Honorariums or “love offerings”

• Other items of measurable value

Even seemingly minor benefits could affect how a volunteer is classified after an injury. A volunteer who isn’t on payroll today could become the subject of a legal dispute tomorrow if there’s disagreement over whether they should have been treated as an employee.

Because these rules differ from state to state, nonprofits shouldn’t assume their volunteer program fits neatly into one category. Instead, organizations should regularly review their volunteer practices with their insurance carrier or broker to understand available coverage options.

A growing exposure for nonprofits

The issue is becoming more important as nonprofit staffing models continue to evolve. Budget constraints and funding uncertainty have led many organizations to reduce paid positions while expanding volunteer programs so they can maintain services. Volunteers are stepping into increasingly important operational roles, sometimes performing duties that were previously handled by employees.

That shift changes an organization’s overall risk profile. The more volunteers an organization depends on, the more important it becomes to understand what protections are available if someone is injured while serving.

Without clear planning, an injury can create uncertainty for everyone involved. The volunteer may face immediate medical bills without knowing whether any insurance applies, while the organization could suddenly be navigating questions about workers’ compensation eligibility, liability and legal responsibility.

Why accident and medical expense coverage matters

When workers’ compensation doesn't apply, nonprofits should consider insurance specifically designed for volunteers.

Church Mutual’s accident and medical expense coverage helps organizations provide financial assistance when a volunteer, guest or other nonemployee is accidentally injured while participating in covered activities. Rather than forcing the organization to wait for questions of liability or workers’ compensation eligibility to be resolved, the coverage can help pay covered medical expenses so injured individuals can receive prompt care.

Depending on the coverage selected, Church Mutual’s medical expense coverage may include:

• Primary medical expense coverage to help pay covered medical bills.

• Wage-loss reimbursement for injured volunteers and, in certain situations, family members who miss work while caring for an injured loved one.

• Loss-of-life benefits following a covered fatal accident.

Risk management matters just as much

Of course, insurance is only one part of protecting volunteers. Strong onboarding and safety practices can reduce both the likelihood and severity of injuries, while also demonstrating the organization took reasonable steps to protect those serving its mission.

Organizations should consider:

• Providing comprehensive volunteer orientation and safety training before work begins.

• Training volunteers for the specific tasks they’ll perform rather than assuming prior experience.

• Reviewing volunteer responsibilities regularly to prevent “role creep,” where volunteers gradually take on more hazardous duties than originally intended.

• Documenting volunteer roles, responsibilities and safety training.

Don’t overlook volunteer waivers

Volunteer waivers can also play an important role in a nonprofit’s overall risk management strategy.

While a waiver isn’t a substitute for insurance and won’t prevent every legal claim, it can help clarify expectations, acknowledge certain risks and strengthen an organization’s position in situations where workers’ compensation and general liability insurance may not respond.

Organizations should carefully draft waivers to comply with applicable state laws and review them periodically to ensure they remain current.

Prepare before an injury happens

Because workers’ compensation rules differ across states, there's no one-size-fits-all answer to whether volunteers qualify for coverage.

The best approach is to have proactive conversations before an accident occurs. Nonprofits may wish to work with their broker to determining what coverage option is best to cover their volunteers, whether any stipends or in-kind benefits could affect eligibility for workers' compensation, and what their current policies cover.

As nonprofits continue adapting to staffing and funding challenges, volunteers will remain essential to delivering critical services. It’s important that organizations understand how they can best protect them.

Talk with your Church Mutual representative to explore whether accident and medical expense coverage can help fill potential coverage gaps.

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