Protecting Nonprofit Volunteers from Liability

volunteer labor exception

Statutes & Volunteer Protection Statutes

Individuals volunteering for nonprofit organizations often wonder about the potential to be held personally liable if something goes wrong.  Fortunately, many states limit nonprofit volunteer liability using volunteer protection statutes.

While the exact scope of these statutes varies between these states, they all provide some basic degree of protection from civil liability for volunteers so long as they act within their duties, do so in good faith, and the injury was not caused by the nonprofit volunteers’ willful or careless conduct.

The Volunteer Protection Act of 1997

There is also a federal law known as the Volunteer Protection Act of 1997 that helps to protect volunteers of nonprofit and government organizations from liability. In most cases, under the federal statute, volunteers will not be held liable for any harm they cause so long as:

  • they were not acting outside the scope of their volunteer duties;
  • they were properly licensed (if relevant);
  • the harm was not a result of the volunteer’s willfulness, negligence, or reckless conduct; and
  • the harm was not caused by the volunteer’s operation of a vehicle that would require a license or insurance. It is important for any board of directors to familiarize themselves with their available state and federal volunteer protections by consulting with legal counsel who specializes in the area.

Boards of directors would also be wise to evaluate whether the organization has enough insurance coverage for volunteer activities and to inform their volunteers of the possibility that they may have to get personal insurance coverage for their own activities.

Related post: Deductions for Nonprofit Volunteers

Insurance Coverage for Nonprofit Volunteer Liability 

Volunteers should make sure that their individual insurance policies cover potential injuries that the volunteer might suffer or cause while on duty. The board of directors of the organization that is hosting the volunteer should also make sure that its volunteers are covered under the nonprofit organization’s insurance policies.

The nonprofit organization’s insurance policies should cover its own liability for the volunteer’s actions as well as cover the volunteers directly. Special insurance policies might be required when insuring volunteers for fundraising events.

Indemnification of Nonprofit Volunteer Liability  

Nonprofit boards should assess whether they will include nonprofit volunteers as part of the group entitled to indemnification for liability under the corporation’s bylaws. Indemnification provisions require the nonprofit to reimburse certain individuals connected to the organization for the expenses they incur during the course of their work for the organization.  

Typically, these provisions are written in state nonprofit corporation statutes. Indemnification of directors is often required while indemnifying others connected with the organization is optional.

Related Post: Liability of Nonprofit Directors and Officers

The board might want to review its bylaws to see if they address the indemnification of the corporation’s volunteers. Oftentimes one finds that the bylaws mandate that the corporation provide indemnification to the “fullest extent allowed by the law”. Even though the scope of these measures may be restricted to officers and directors, it may also specify the indemnification of “agents”, which include volunteers in most cases.

Before actually extending the nonprofit organization’s indemnification obligations to volunteers, the board of directors should ensure that the corporation is financially able to indemnify its volunteers without dipping into operating funds.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide. Ellis also advises donors about significant gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.

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