Volunteer
Protection Act of 1997
In
1997,
President Clinton signed into law the Volunteer Protection Act of 1997
(Act) that, generally speaking, provides immunity from tort claims that
might be filed against the volunteers of nonprofit organizations.
NPCC's
Government Relations Committee is considering supporting legislation
that
would make such protection contingent on the organization carrying
general
liability insurance at adequate levels. The Act raises some serious
questions
that are briefly outlined here.
When an individual
performs volunteer services for a nonprofit he exposes himself to the
risk
of having a claim filed against him by someone who believes he has been
hurt by the volunteer. The most significant kind of nonprofit
liability
involves bodily injury--people being physically hurt. Bodily injury
claims
are particularly troublesome since they can involve demands for large
amounts
of money. Recoveries for pain and suffering can be huge and such claims
can be financially devastating for those against whom they are filed.
It
should be kept in mind that when an employee or volunteer carelessly
hurts
someone, not only will he be liable, but the organization for whom he
works
will also be liable for the reason that principals are liable for the
acts
of their agents.
It is to protect against such exposures that nonprofits carry general
liability
insurance. A general liability insurance policy protects an
organization
against bodily injury and property damage claims. Board members are
covered
and frequently employees are also covered. However, most general
liability
policies do not cover volunteers. Special insurance can be purchased
fairly
inexpensively to cover its volunteers' potential liability, but many
nonprofits
are neither aware of its availability nor have sufficiently considered
the liability exposures of their volunteers. It should be noted that a
fair number of nonprofits do not carry any sort of general liability
insurance.
The Volunteer
Protection Act provides immunity from lawsuits filed against a
nonprofit's
volunteer where the claim is that he carelessly injured another in the
course of helping the nonprofit. The Act does not provide immunity
to the
organization itself. Prior to the adoption of the Act, under the law of
most states, a volunteer who negligently hurt someone would be
personally
liable. Now the Act preempts all such laws and the volunteer is immune
from suit. The new law only applies to uncompensated volunteers who
help
501(c)(3) and 501(c)(4) nonprofits. The immunity is a qualified
immunity
and protects the volunteer only against claims of negligence and not
against
claims of gross negligence, willful or criminal misconduct, reckless
misconduct,
or conscious, flagrant indifference to the rights or safety of the
individual
harmed by the volunteer. The difference between negligence and gross
negligence
is one of degree: gross negligence involves a greater degree of
carelessness
than negligence. Some wonder whether the Act provides real protection,
since all anyone wishing to sue a volunteer (who they believe has
carelessly
hurt them) needs to do to keep the volunteer from raising the Act as a
shield is to allege gross negligence rather than negligence in their
complaint.
Nonetheless it is likely that the Act does provide some protection to
volunteers
and thus may encourage volunteerism. However, we believe that the Act
has
a downside. Providing immunity to a volunteer who has injured someone
as
a consequence of his carelessness would seem to clash with the
charitable
goal of helping others. Many might believe, for instance, that those
who
volunteer for a nonprofit should be held to the same standard of care
as
the rest of us. In cases where a nonprofit has no assets to speak of, a
party injured as a result of the carelessness of a volunteer may well
have
no recourse against anyone and will not be compensated for her
injuries.
Because it lacks assets, the nonprofit will not be worth suing and
because
of the Act's protection, the volunteer will be immune from suit. One
may
fairly wonder whether it is in the long-term interest of a nonprofit's
reputation to let someone go uncompensated in these circumstances.
It should be kept in mind that the chance of someone being hurt by an
agent
of a nonprofit without being reimbursed for her injuries would not
exist
if all nonprofits carried adequate general liability insurance. Indeed,
we believe it is desirable for a nonprofit to carry general liability
for
at least two reasons. First, to avoid being devastated in the event of
someone successfully prosecuting a negligence claim against the
nonprofit
that results in a judgment requiring it to pay large sums of money in
damages.
Second, to be able to adequately compensate someone who has been hurt
as
the result of the negligence of one of its agents. Related to this
second
reason, we believe that when, in carrying out its mission of helping
others,
a charitable nonprofit injures someone as the result of the
carelessness
of one of its agents -- an occurrence that can be protected against but
which nonetheless happens -- the nonprofit should be in a position to
make
whole those whom they have hurt.
There is a
provision of the Act which, if taken advantage of, would assure that
innocent
third parties hurt by the carelessness of nonprofits' volunteers would
be adequately compensated for their injuries while, at the same time,
providing
personal immunity to such volunteers. This part of the Act allows a
state
to require that a charitable organization must "provide[s] a
financially
secure source of recovery for individuals who suffer harm as a result
of
actions taken by a volunteer in behalf of the organization," before its
volunteers gain immunity under the Act. (A general liability policy
with
adequate limits would be considered a financially secure source of
recovery.)
Thus, if New York passed such a law, for charitable nonprofits to avail
their volunteers of the protection of the Act they would have to
purchase
general liability insurance (or provide some other means of financial
security),
and should organizations choose not to do so, its volunteers would then
be liable if they carelessly injure someone. We therefore believe that
the nonprofit community ought to consider seriously whether it is in
its
long-term interest to promote the passage of such a law by New
York.
Some may point out that the money needed to purchase general liability
insurance would be better spent in carrying out the nonprofit's
mission.
We do not find this argument persuasive. First, we do not believe that
the expenditure of a relatively small amount of money for general
liability
insurance will cause a significant diminution in the level of service
provided
by the nonprofit. For this small amount, it should be remembered that
general
liability insurance will provide recoveries not only to those hurt by a
nonprofit's volunteers but also at the hands of their employees.
Second,
there is also the possibility that when the public learns of an
innocent
third party not being compensated for injuries caused by the careless
acts
of a nonprofit volunteer, the damage done to the reputation of the
entire
sector will cost more than the loss in services resulting by having to
spend a little extra money for liability insurance. Finally, we believe
it does not lie well in the mouths of representatives from the
charitable
sector to make this kind of calculating argument.
NPCC's
Government
Relations Committee welcomes comments and suggestions from members on
this
topic. Contact Jon Small at NPCC at 212/502-4191, extension 23 or email.
Copyright 1998-90
Nonprofit Coordinating
Committee of New York