Non-profit organizations may rely on any combination of paid employees and unpaid volunteers. Their contributions may be equally valued, but they are covered by different non-profit insurance policies. Non-profits need to know the difference to make sure they cover their staff, maintain legal compliance, and safely operate within Hawaiʻi to avoid the costly fallout from liabilities specific to non-profit organizations.
We’ve compiled the following list of differences between volunteer and employee insurance coverage for non-profits in Hawaiʻi. This guide is designed to help your NGO better determine how much non-profit insurance coverage is necessary for your needs.
Why Volunteers and Employees Need Different Coverage
Unpaid volunteers and paid employees have different employment and legal statuses. Employees are protected under Hawaiʻi’s labor laws, receive compensation for their work, and go through a formal hiring process. On the other hand, volunteers give their time to the organization without compensation or legal employee classification. Therefore, Hawaiʻi’s employment regulations do not affect them the same way.
The 2024 Revised Title 7 of Hawaiʻi’s labor laws governs use of volunteer labor in great detail, and states that volunteers are excluded from legal employment provisions set up by the state. This includes the rules of workers’ compensation, leave, benefits, and unionization. From a legal standpoint, their position does not qualify as “employment.”
Volunteers are not employed and are, therefore, not eligible for workers’ compensation. However, insurers are able to cover them differently, as non-profits can still be liable for injuries or damages involving volunteers. Hawaiʻi business insurance coverage should be customized to assess these specific risks.
Insurance Coverage for Volunteers
Volunteers are not covered directly by standard business insurance policies. The following specific coverage types may be needed to extend insurance protection to volunteers:
- Volunteer Liability Coverage: This coverage protects volunteers against personal liability. This is used in claims involving a volunteer’s actions that result in damage or injury.
- Volunteer Accident Coverage: This coverage helps pay for medical expenses if volunteers are injured during business activities. It works in tandem with the volunteer’s personal health coverage.
- General Liability Coverage: General liability insurance is a necessity for non-profits to cover claims involving property and injury damage. Many existing general liability policies can be expanded to include volunteers.
- Personal Auto Liability Coverage: Many volunteers drive their own vehicles for business purposes. This coverage protects the non-profit from liability when volunteers are involved in accidents in their personal vehicles.
These coverage add-ons can extend a non-profit’s existing coverage to include liabilities involving their volunteers or create new coverage for certain situations. Consider reviewing these areas when planning insurance strategies around the needs of volunteer workers.
Insurance Coverage for Employees
A non-profit organization’s paid employees are covered by standard policies but may also require other considerations:
Workers’ Compensation Insurance: As set forth by Hawaiʻi, paid workers must be protected by workers’ compensation insurance. These policies cover medical expenses, lost wages, and disability costs if an employee is injured during business operations.- General Liability Insurance: This coverage pays for third-party claims involving property damage or bodily injury resulting from an employee’s actions.
- Health and Disability Insurance: Non-profit organizations may offer group health plans, including disability insurance, to their paid employees. Employment benefits factor into the value of paid positions. They rarely apply to volunteer workers.
- Employment Practices Liability Insurance: This insurance protects non-profits from liability claims against employees. These can include claims of discrimination, harassment, or wrongful termination.
How to Manage Insurance for Non-Profits
Non-profit organizations must clearly strategize their insurance plans for paid and volunteer workers. These steps summarize a balanced approach to managing insurance for both types of employees:
- Clarify the roles of employees to avoid overlapping legal responsibilities and unclear insurance coverage criteria.
- Review existing insurance plans to update coverage, explicitly denoting paid or volunteer employees to properly itemize coverage.
- Reassess the organization’s risk profile to determine the specific risks faced by volunteer and paid employees.
- Provide role-based training to minimize safety risks and help employees and volunteers understand their positions more clearly.
- Partner with an experienced local insurance advisor to review coverage gaps and refine protection for personnel, regardless of their employment status.
Contact Atlas to Manage Volunteer and Employee Insurance Coverage
Non-profit organizations can protect their paid employees and unpaid volunteers with the right types of insurance coverage. Though the protections for both are similar, volunteer and employee insurance policies differ based on the roles, responsibilities, and legal status of each worker.
At Atlas Insurance, our team of experienced local insurance advisors has helped non-profit organizations maintain Hawaiʻi business insurance for their employees and volunteers for over 95 years. We offer a personalized approach to addressing the needs of each of our clients and ensuring their wellbeing and success.
Contact our team today to reduce on-site liability, improve worker safety, and reduce organizational risk with insurance plans tailored to the needs of your workforce, regardless of their legal employment status.