"What Nonprofts Need
to Know About the Nonowned
Automobile Exposure" (PDF, 21k)
be advised that the purpose of this website to help nonprofit managers,
employees and volunteers to better understand the insurance products
available for social service organizations.
Statements made on this website are referring to insurance products
in general. Nothing can take the place of an agent who can guide
you in making decisions as to how to spend the money you have available
for insurance. Each nonprofit is different and needs must be considered
If you need to discuss your particular entity's insurance needs
we urge you to seek out an agent who is skilled in insurance for
Mary D. McCowen, CIC, AAI
Accidents & General Liability Policies
The purpose of the general liability policy is to protect the entity should
property damage or bodily injury occur to someone else
due to negligence. Volunteers are often added as additional insureds
to the general liability policy; they can act on behalf of the organization
with the assurance that they are covered.
There is often a $5,000 medical payments as a part of the general
liability. This protects that “unknown third party” person
who comes onto the premises and slips. (Often referred to “Slip
and Fall”) This medical payment benefit is NOT for the
benefit of either an employee or a volunteer.
If an employee is hurt on the job the policy addressing that incident
would be workers’ compensation. We are now
fortunate to have a worker’s compensation market that will add volunteer
coverage through an endorsement.
Small nonprofits utilizing the services of volunteers should be certain
that the volunteer understands that should an accident occur the volunteer
will be expected to have her own medical insurance pick up the expense.
Georgia Law requires that all companies with three or more employees carry
worker’s compensation. However, it is possible to purchase
WC with only one employee.
There are sometimes accident policies available in certain situations
that can be purchased to cover the volunteer.
This brief summary is meant to alert the nonprofit to the need to consider
the possibility of a volunteer being in an accident. This summary
does not address the issue of a vehicle (owned or non-owned) being
involved in the accident; that would be the subject of a future summary! If
you would like to discuss this further my direct line number is 770-804-4833
What Nonprofits Need
to Know About
The Nonowned Automobile
In the state of Georgia automobile insurance is mandatory for each vehicle
on the road. The owner of the vehicle must carry the insurance.
The nonprofit with no owned vehicles still has volunteers and employees
in their cars doing errands or performing services. If that volunteer
should have an accident while on business for the nonprofit there is an
exposure. In the event of a catastrophic accident there may be a law suit
against the nonprofit as well as the owner of the vehicle.
Liability insurance is for the benefit of that unknown
third party you may damage. A driver does not set out to hit another vehicle
and doesn’t know who he may damage through negligence.
Nonowned automobile liability covers the entity for suits of this nature.
$1,000,000 is the amount usually written. Cost is minimal in most cases
(less than $200 annually for small groups).
What Nonowned Automobile Liability Does Not Cover:
The vehicle itself; the owner’s insurance or the owner himself must
cover the vehicle.
Bodily injury for the volunteer or employee driving. The driver may have
medical insurance, or WC may cover, or the policy covering the vehicle
may have medical payments coverage.
Volunteers and employees of nonprofits need to review their automobile
insurance policies. We recommend that they carry $50,000 medical payments.
This is the maximum available, and covers each person in the vehicle for
that amount. $5,000 is the minimum. It is a no-fault coverage.
Qualifications to Add Nonowned Auto to The Policy:
Entity must keep copy of the employee/volunteers dec page from policy
showing that they carry at least $300,000 liability (we have only one
company that requires only $100,000).
Entity must check MVRs of employees/volunteers who drive on behalf of
the organization and keep that information on file. If MVR is unacceptable
that person must not be allowed to drive.
Entities with owned vehicles also need the nonowned automobile liability.
This can be usually be purchased for both hired (you rent a vehicle for
the weekend) and nonowned.
Please call if you have further questions!
Mary D. McCowen, CIC, 770-804-4833