Oxfam
welcomed a well-known commercial name as a recruit to its
volunteer workforce last month. Topshop’s former brand
director Jane Shepherdson, who will help the charity develop
its ethical fashion business, is the latest example of top
talent willing to offer their services voluntarily.
And charities are attracting voluntary workers from an increasingly
diverse base. They range from young people willing to spend
a gap year helping a cause and those who have years of working
experience who decide to take a career break, to senior citizens
who have retired but are still fit and wish to put something
back into the community.
Smaller charities will always be reliant on volunteer staff
as they lack the money and resources for a large paid workforce.
This raises the question of how they are regarded for insurance
purposes.
The Charity Commission’s guide Charities and Insurance
addresses the issue of insuring volunteers, noting that their
rights and positions may differ from those of the charity’s
paid employees. Volunteers should be given adequate training
and supervision and both they and those that they come into
contact with during the course of their work should be “afforded
care for their well being”. This includes the duties
imposed by legislation such as the Health and Safety at Work
Act.
The Commission suggests that charity trustees regard volunteers
as being employees for insurance purposes, which means including
them under its employers’ liability (EL) and public
liability (PL) coverages. It also recommends that the policy
definition of the term ‘volunteer’ be checked
and that the charity keeps records of individuals working
for it that come within the definition.
Insurer Zurich recommends that charities also consider personal
accident cover, to provide compensation should a volunteer
suffer accident or assault while going about his or her work,
and money insurance if volunteers are involved in handling
money or taking it to the bank.
Paul Emery, Zurich’s head of charities and the voluntary
sector, says that a charity’s PL cover automatically
covers voluntary workers, but EL cover has to be specifically
extended. “Certainly, if there is any element of a contract
– even if only verbal – between the charity and
a worker then it is advisable to have EL, particularly when
that worker carries out a task regularly and to a specific
standard,” he suggests.
However, it is up to the charity to make the decision as to
whether they wish to afford voluntary staff the same benefits
as paid employees, and this includes whether to provide them
with EL cover.
“Zurich also takes the view that insurance should be
made simple, so we offer a standard package, which would include
EL, PL, motor, personal accident and money,” says Emery.
This offers a cost saving over buying the covers individually.
“We’ve sought to remove any potential barriers
from our products and services that might stand in the way
of encouraging voluntary work,” he adds.
However, he points out that covering voluntary workers while
outside of the UK requires more individual underwriting. While
a regional charity carrying out local work can be easily provided
with a package policy, overseas work has to be considered
much more on a case-by-case basis.
Steve Carroll, managing director of Markel (UK), an insurer
of social welfare risks including charities, agrees that insurers
need to understand the charity they are insuring.
Markel’s policies automatically cater for volunteers
under the EL and general liability sections, but also provide
extended employment practices protection.
The latter cover caters for potential employment disputes
between employer (the Charity) and employee in areas
such as unfair dismissal and discrimination. This is because
while most charities recognise that they have legal responsibilities
to employees on the payroll, they often do not appreciate
that the same legislation may apply in respect of their volunteers.
“Charities have to be very careful when agreeing how they
reimburse volunteers for out of pocket expenses, so as
not to create what may later be deemed by an Employment
Tribunal to be a formal contract of employment,” adds
Carroll.
“Only when a volunteer takes the charity to a tribunal
will they know whether or not they did things right, as the
tribunal will decide if the volunteer should be deemed an
employee for the purposes of the claim. Our policy therefore
responds in respect of employees and volunteers accordingly”.
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Career break workers
The decision on whether to buy EL cover for volunteer workers
was particularly difficult four or five years ago, when rates
moved sharply higher for commercial and non-profit organisations
alike.
“There has been a perception by some insurers that charities
represent a risky business, as workers are often dealing with
vulnerable people in potentially dangerous situations,”
observes Chris Pitt, spokesperson for Ecclesiastical Insurance.
However, he adds that not only have EL rates softened in the
past few years, but dialogue between insurers and non-profit
organisations has provided a better understanding of the activities
undertaken by charity workers.
Another reason for extending liability covers to volunteer
workers is the change in societal attitudes. Charities are
still held in considerable esteem by the general public, but
suing them is no longer regarded as taboo. Aware of the compensation
culture, most ensure that volunteers receive suitable training
before they take up their work: “Charities are becoming
much more professional,” comments Pitt.
VSO, the international development charity that works through
volunteers, practices stringent risk management, according
to its insurance administrator, Mike Goodwin, who says it
ensures that the right individuals are selected and they know
what to expect before starting work.
And while VSO has an emergency policy ready to get volunteer
workers out of danger zones quickly, it hasn’t had to
be employed too often.
The organisation’s application procedure, which includes
a medical assessment, occupies a period of up to one year.
Successful applicants then undergo a training period of three
to four months before placement. However, VSO also offers
a number of short-term volunteer programmes ranging from two
weeks to between three and six months.
Goodwin says that VSO’s own experience has been a gradual
rise in the average age of volunteers over the years. It now
stands at around 40, due partly to the growing number of people
taking a year or two out from their regular employment. The
number of volunteers, which dipped in the wake of the 11 September
terrorist attacks, is now back on the rise.
And despite reports of rising EL rates, the organisation’s
biggest insurance problem proved to be medical insurance costs,
which soared as a result of 9/11.
“We continually review our insurance programme for voluntary
staff and carried out the most recent one at Christmas when
it was recommended that we consider kidnap and ransom insurance,”
reports Goodwin. “In the past, only commercial organisations
were targeted, but charities can no longer assume they are
exempt.
“We took out directors’ and officers’ liability
cover last year for the first time as there is a potential,
albeit fairly limited, for damaging claims.”
Working in the danger zones
One of the companies specialising in providing travel and
emergency medical insurance for volunteer workers and missionary
aid workers involved in overseas projects is Banner Financial
Services. Staff have regularly joined voluntary teams involved
in short-term projects, recent examples including Sierra
Leone and Sudan. The company also recently provided insurance
for American nationals working on a Darfur humanitarian
relief project, who were experiencing problems in obtaining
cover.
Robin Williams, a director of Banner, reports that it insures
around 10,000 voluntary workers each year. Customers range
from individuals from local church groups, who may bear
the cost of cover themselves, to organisations such as the
Salvation Army.
“We provide travel cover suited to their particular
needs, rather than that provided by a standard policy,”
he says. “Premiums tend to be higher, but the level
of cover is appropriate and applies for the duration of
their work period.”
He adds that the company’s underwriter has a good
understanding of the risks and is able to assess areas of
the world requiring special consideration, such as war zones.
While high-risk areas attract higher rates, the company’s
policy is to offer cover that is often unavailable in the
wider market and to ensure that the cost is not prohibitive.
Banner typically writes a 12-month contract. An individual
working as a volunteer for a longer period would therefore
receive an annual policy renewable at the end of each year.
Williams adds that the company is receiving a steady rise
in requests to cover items of business equipment such as
computers and expects this to grow further.
And while some individual claims have proved expensive,
such as for repatriation, emergency medical treatment and
airlifting volunteer workers, the underwriting experience
overall has been good.
He admits that one problem is the increasing number of voluntary
workers aged 75 and over. Although improved health and fitness
means many are ready and able to offer their services, as
with travel insurance for older people vacationing, cover
is not readily available due to the risk of what can still
be sizeable medical bills. A possible option is to scale
down the cover and benefits offered, rather than decline
cover entirely.
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