Insurance

Most non-profit organizations rely on volunteers in some way, whether the organization is 100 per cent run by volunteers, or has staff who engage volunteers to support the organization’s operations. The following are some insurance-related considerations to keep in mind when using volunteers.

Coverage under a volunteer’s personal insurance policy

A volunteer’s personal homeowner, condo or tenant’s insurance policy may protect him or her against some risks related to volunteering. For example, if a volunteer damages his or her own camera or other personal property while volunteering, it may be covered under the volunteer’s personal policy.

As well, if a volunteer is negligent and injures someone while carrying out his or her volunteer role, and the injured party seeks compensation, both the organization’s insurance company and the volunteer’s personal insurance company should be advised.

An organization’s liability for its volunteers

Your organization may be liable for the actions of your volunteers, particularly if they are acting within the scope of their volunteer job description. Visit Volunteer Canada online at www.volunteer.ca to learn more about how to reduce your liability through volunteer job descriptions, screening and training volunteers.

Protecting volunteers

You should ensure that your organization’s general liability policy is extended to include volunteers. This will give your volunteers the same protection as your employees (if you have employees) if they are sued for their actions while operating within the scope of their duties.

All non-profit organizations have a governing body, such as a volunteer board of directors. As the leaders of the organization, it is common for volunteer board members to express concerns about their personal liability for the organization’s operations. Directors and officers liability insurance covers against risks that are not included under your organization’s general liability policy, such as:

• claims arising out of board decisions or omissions; and
• actions or activities performed directly under the auspices of the board of directors. Policies are usually issued on a claims-made basis.

Your organization’s decision to buy D&O insurance should be based on your level of risk. Most non-profit D&O claims are employment-related, so the level of exposure is usually low for organizations with few or no employees. Talk to your broker or agent, and your board, about D&O insurance requirements.

Unless it has the financial resources to survive uninsured lawsuits, a non-profit needs coverage for all of its insurable liability exposures. This always includes general liability and D&O liability, and might include more specific types of liability depending on the nature of a particular non-profit’s operations.

Some of the common types of commercial insurance for non-profits include:

• automobile (owned and non-owned coverage);
• business interruption; 
• commercial or comprehensive general liability;
  
• crime;
  
• D&O;
  
• errors and omissions;
  
• liquor liability;
  
• machinery breakdown;
  
• professional liability (including malpractice liability);
  
• property;
  
• special events liability; and 
• tenant’s legal liability.

Screening is an ongoing 10-step process designed to identify any person – whether paid or unpaid, volunteer or staff – who might harm children, youth or other vulnerable persons. Screening helps people know that you care about the people you serve in your community. Screening is performed by an organization to ensure that the right match is made between the work to be done and the person to do it. The screening process is clearly communicated and consistently delivered. Screening begins before someone starts volunteering, and continues throughout his or her involvement with the organization. The proper management and screening of volunteer resources plays an important part in an organization's ability to carry out its mission.

1. Determine the risk
2. Write a clear position description
3. Establish a formal recruitment process
4. Use an application form
5. Conduct Interviews
6. Follow-up with references
7. Request a police record check/and other checks where relevant
   
8. Conduct an orientation and training session
9. Supervise and evaluate
10. Follow up with program participants

Although insurance policies issued by different companies may look different, they usually include policy declarations pages and policy wordings. The declarations, or dec pages, are usually the first pages of the policy, and they provide some basic information, including:

• policy number; 
• name and address of your organization (the insured);
  
• broker or agent name and address;
  
• coverage details that are specific to your organization (types of insurance and dollar amounts);
  
• policy premium (in dollars); and 
• policy period (when it begins and ends).

Policy Review Checklist

• Review the declaration page carefully and ensure that all the details, including the types and amounts of coverage, are correct.
  
• Ensure that your organization's name and address are correct.
  
• Make sure that the addresses of any insured properties are correct.
  
• Verify the effective dates of the policy, and make a note of the renewal date.
  
• Read the conditions and exclusions carefully.
  
• If any words are unclear, ask for them to be defined in the policy.
  
• If you have any questions, talk to your broker or agent.

Risk is the possibility of a loss or event that has the potential to interfere with an organization’s ability to fulfil its mandate. Injuries to volunteers or employees, abuse of a client, damage to property, and robbery are just a few examples. Every activity your organization undertakes has inherent risks and liabilities.

Risk management is a structured approach to help identify these risks, and create and implement a plan to reduce or eliminate them. It is almost impossible to eliminate all the potential risks connected to your organization’s operations. When risk is present, insurance is one of many tools that can help protect your organization. However, buying insurance is only a small part of risk management. A risk management plan is comprehensive and includes other types of preventative steps to avoid risk. For example, the plan may include a combination of internal policies and procedures, complemented by the appropriate insurance coverage.

For more information on screening volunteers please visit:

• Volunteer Alberta:  Screening Process – Creating a Culture for Volunteer Involvement
• Public Safety Canada’s: Best Practice Guidelines for Screening Volunteers
• Insurance Bureau of Canada: Volunteer Sector, Screening and Training

For more general information on types of insurance and managing your policy, please visit:

• Volunteer Alberta’s Insurance Toolkit

For more information on risk management please visit:

• Volunteer Alberta’s Risk Management

For more information on directors and officers liability, please visit The Chartered Accountants of Canada website:

• Liability Indemnification and Insurance for Directors of Not-for-Profit Organizations
• 20 Questions Directors Should Ask about Directors’ and Officers’ Liability Indemnification and Insurance 

For a detailed list of member insurance brokers in New Brunswick who offer coverage categorized under various needs of interest to the sector, please visit

• New Brunswick Insurance Brokers Association – Insurance for Non-Profit Organizations

For more information on what to consider when making decisions on your insurance needs, please visit the Insurance Bureau of Canada’s website:

• Insurance for voluntary organizations: Things to consider

For more general information on insurance and liability, please visit the Imagine Canada website for useful resources:

• Insurance & Liability Resource Centre for Nonprofits

The Atlantic Task Force on Insurance Availability and Affordability - Formed in February 2005 by the Insurance Bureau of Canada’s Atlantic office, this task force developed recommendations to increase insurance availability and affordability for commercial and not-for-profit sectors in Atlantic Canada, and to foster, among these consumers, a greater understanding of the insurance product. 

• Final Report from the Insurance Availability and Affordability Task Force
• Progress Report on the Task Force Report

Insurance Bureau of Canada and the Community Services Council Newfoundland and Labrador

• Improving The Insurance and Public Policy Environment For Non-Profit and Voluntary Organizations In Atlantic Canada

Volunteer Canada

• Directors’ Liability: A Discussion Paper on Legal Liability, Risk Management and the Role Of Directors in Non-Profit Organizations