Volunteers or employees: which are they?

Volunteers can be valuable assets to many camps and nonprofit organizations. They also require that camps examine a number of legal and risk management issues. When volunteers and camp employees perform the same services, the camp faces a unique risk management challenge that it should address in its policy and procedures manual.

For example, the buildings and grounds committee of a nonprofit organization might sponsor a work weekend to paint buildings or make needed repairs. While their contributions are helpful, they create additional risks for the organization.

Volunteer training

In many cases, the rules and safety practices that apply to employees should also apply to volunteers. Volunteers' exposure to injuries is the same as regular employees'. The camp should give volunteers appropriate training. Never assume that volunteers or employees know how to operate equipment such as chain saws, circular saws, and similar equipment.

Risk management issues

A variety of issues can develop when a volunteer is injured. Will you be able to provide the same quick response to accidents that you offer during the camp season? Does the volunteer have health insurance? How will the volunteer pay for his or her hospital medical expenses? While most health insurance companies pay for emergency treatment, some set limitations on which physicians can be used. How will you handle covering the medical bills if the volunteer has unreimbursed medical expenses? Will the injury cause the volunteer to lose work time? If so, does the camp or the volunteer carry disability income insurance?

Using volunteers also presents hidden risks. Often, the camp will offer the volunteers some type of remuneration for their time and effort, usually room and board. While this practice seems only fair, it could result in the volunteers' being considered employees under your Workers' Compensation insurance.

Employees in nearly all states in the country can file Workers' Compensation claims against their employers. Workers' Compensation pays for lost wages, medical expenses, and rehabilitation. Coverage is usually fairly liberal under your general liability policy and in most instances, it helps to prevent a lawsuit. Although the Workers' Compensation system is cumbersome and expensive, it may be more efficient and less expensive than a lawsuit in the long run.

Although there are exceptions, a rule of thumb applies. If volunteers are injured while performing work for the camp, they are likely to be considered employees. This situation can pose a financial risk to the camp by requiring an additional unbudgeted premium under your Workers' Compensation policy, which could be sizeable. Incurring a claim against your Workers' Compensation policy might adversely impact your experience modification or result in a claim against your general liability policy.

Some camp directors are confident that volunteers will not pursue a legal remedy against their camp if injured while volunteering. While this assumption may hold true for volunteers who sustain minor injuries, this perception might not be true for those with serious injuries.

Covering volunteer injuries

Most volunteer injuries are minor. Those injuries involving only medical claims should be covered by a volunteer accident medical policy. Such policies are relatively inexpensive. Although limits per accident vary among insurers, limits of $25,000 are probably appropriate in most instances. Incidents resulting in volunteer injuries should always be reported to your insurance company through your agent.

If the injury is serious, the volunteer will usually file a claim against one or more of your insurance policies. A claim under your Workers' Compensation insurance may be successful, depending on the circumstances of the injury. How much direction and control did the camp exercise over the volunteer's activities? The more supervision, the more likely your state's Workers' Compensation board or commission will grant Workers' Compensation coverage.

Solutions

Try to minimize potential problems when using volunteers. Notify the insurance company that carries your Workers' Compensation plan that you use volunteers in your operations. Some insurers will add endorsements to their policies, covering volunteers by using an imputed hourly rate to calculate the premium. Be proactive about training these volunteers and enforcing safety practices. Find out whether your volunteers carry health insurance and how that insurance would function if they were accidentally injured at camp. Consider purchasing a volunteer accident medical policy. Identify activities that present severe risks and take steps to reduce, eliminate, or prevent such incidents and exposures that could result in injury. In short, be prepared and know the risks.

Ed Schirick is senior vice president of the Markel Insurance Company camp and youth recreation division. He is a charted property casualty underwriter and a certified insurance counselor. Send your risk management inquiries to: Ed Schirick, c/o Markel Insurance Company, 4600 Cox Road, Glen Allen, VA 23060.

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