Volunteer Immunity Is Not Insurance: Nonprofit Board Guide

Every few months an executive director tells me some version of this: "We're a charity. The law protects our volunteers, so we're fine."

It is half true. The missing half is where nonprofits and houses of worship get hurt.

I'm Jason Rodriguez. I hold both the CIC and CPRM designations, and I work as an independent advisor to nonprofits and faith-based organizations in Delaware, Pennsylvania, New Jersey, Maryland and Virginia. A shield for a person is not a policy for an organization. Immunity is a defense your lawyer raises in court. Insurance is what can pay the lawyer, and pay a covered claim if the defense does not end the case.

What the federal Volunteer Protection Act does

Congress passed the Volunteer Protection Act of 1997 (42 U.S.C. 14501 to 14505) because fear of lawsuits was keeping people off boards and out of service.

Under the Act, a volunteer for a nonprofit or government entity is generally not liable for harm caused while serving, if four things are true:

• The volunteer was acting within the scope of their responsibilities.
• The volunteer was properly licensed or certified, if the activity required it.
• The harm was not caused by willful or criminal misconduct, gross negligence or reckless misconduct.
• The harm was not caused by operating a motor vehicle, vessel or aircraft that requires a license or insurance.

A "volunteer" under the Act receives no pay beyond reasonable expense reimbursement, and nothing of value in place of pay worth more than $500 a year. Unpaid directors, officers and trustees count.

The exceptions boards miss

• It protects the volunteer, not the organization. The Act says it does not affect the liability of the nonprofit itself.
• Driving is out. If a volunteer causes a crash on a food delivery run, the Act's protection does not apply.
• Serious misconduct is out. The limits do not apply to crimes of violence or sexual offenses that end in a conviction, hate crimes, conduct found to violate civil rights law, or acts committed under the influence of alcohol or drugs.
• Your organization can still sue its own volunteer.

The Act also lets states add more protection. All five states I serve have their own statutes.

Volunteer immunity laws in DE, PA, NJ, MD and VA

Delaware says the quiet part out loud. Even though the volunteer is immune, proof of the volunteer's negligence is enough to hold the organization liable.

Maryland ties immunity to insurance. Section 5-406 protects the individual only if the organization carries a policy that covers the act and meets set minimums. One option is $200,000 per claim and $500,000 per occurrence, with any deductible at $10,000 per occurrence or less. Recovery from the organization is then limited to the insurance limits.

New Jersey has the broadest shield, and it reaches the organization. But it only answers claims by people who benefit from your work. Section 2A:53A-7.4 removes it for claims that negligent hiring, supervision or retention led to a sexual offense against a minor the organization served.

Virginia's main section speaks to officers, directors and trustees. It does not name frontline volunteers, so ask counsel how the federal Act and Virginia law fit together for them. For houses of worship, § 8.01-220.1:3 says a member of a church, synagogue or religious body is not liable for the acts of its leaders or other members solely because of membership.

Statutes change and courts interpret them. Confirm how these apply to you with a licensed attorney in your state.

Why immunity still leaves gaps

Defense costs. Immunity is an argument. Someone has to be paid to make it. A suit that gets dismissed can still leave legal bills behind.

The organization's own liability. The federal Act and most of these state laws protect individuals. The nonprofit is usually the one with the building, the bank account and the name on the complaint.

Auto. The federal Act and four of the five state statutes above treat driving differently from everything else. If your volunteers drive, immunity is the wrong place to look.

Employment claims. These laws deal with harm a volunteer causes. A wrongful termination, discrimination or harassment claim from an employee is aimed at the organization as the employer. The federal Act's limits also do not apply to conduct found to violate civil rights law.

Abuse claims. The federal Act excludes sexual offenses that end in a conviction. New Jersey removes charitable immunity for sexual abuse. These claims usually ask what the organization did: how it screened, trained and supervised.

The exceptions themselves. Every statute here stops at gross negligence, willful misconduct or something close to it. Whether conduct crossed that line is often the very thing being argued.

The insurance that fills the gaps

No single policy does all of this. A sound nonprofit insurance program has several parts. What each one covers depends on the policy language, limits and exclusions.

General liability

General liability is designed for bodily injury and property damage claims from the public. Think of a visitor who falls at your food pantry. Ask whether volunteers are included as insureds. That is the heart of nonprofit volunteer liability insurance.

D&O with employment practices

Nonprofit D&O insurance is built for claims over how the board and leadership governed: decisions, oversight, alleged mismanagement. Employment practices coverage addresses claims like wrongful termination, discrimination and harassment. For many small nonprofits, the defense bill is the real threat. This is the coverage aimed at it.

Volunteer accident

Volunteer accident coverage helps with medical bills when a volunteer is hurt while serving, without a fight over fault. Workers' compensation is built for employees. Whether it reaches volunteers depends on state law and your policy.

Hired and non-owned auto

This protects the organization when someone drives a personal or rented vehicle on your business. Since driving is carved out of so many of these laws, this is one of the first things I check. If you own vehicles, you need commercial auto too.

Abuse and molestation coverage

General liability policies often exclude abuse claims. If you serve children, seniors or vulnerable adults, ask for this coverage by name and get the answer in writing.

Cyber for donor data

Donor names, payment details and client records are valuable to criminals. Cyber insurance is designed to help with breach response, notification and related claims.

A board checklist

1. Ask your attorney which immunity statutes apply to you, and which exceptions matter most.
2. Write a role description for every volunteer position. Scope of responsibility matters under the federal Act.
3. Confirm your general liability policy includes volunteers as insureds.
4. Confirm your D&O policy covers the organization and its people, and includes employment practices.
5. List everyone who drives for you. Check licenses, personal auto insurance, and your hired and non-owned auto coverage.
6. If you serve minors or vulnerable adults, confirm abuse and molestation coverage and review your screening rules.
7. In Maryland, compare your limits and deductible to the minimums in Section 5-406.
8. Decide how an injured volunteer's medical bills would be paid.
9. Map where donor and client data lives, and who can reach it.
10. Put this review on the board calendar every year.

If you want a second set of eyes, that is what I do. Read more about how I work or reach out directly. Good people give their time to your mission. Let's make sure one bad afternoon does not undo it.

General education, not legal advice.

Book a 30-minute review: https://calendly.com/prominentins/30min or call (302) 351-3368.