Are You Covered While Doing Good?

Policyholder Advisor & Alert

PUBLISHED ON: April 1, 2008

Are you and your employees protected by your insurance while doing volunteer or pro bono work? The time to check is now.

After the September 11, 2001 attack on the World Trade Center, numerous people showed up at the site to help as volunteers. Recently, a group of engineering firms has made the news because the firms’ reward for this effort has been thousands of claims. The New York Times profiled one engineering firm that has been hit with 8,000 lawsuits in connection with services it performed while the debris was cleared. Most allege that the claimants became ill by breathing the air at the site during the recovery or where the debris was stored. The engineering firms (most of which eventually were required to become paid contractors in order to continue the work) argue that they had no control over, or responsibility for, the air at the site.

The arguable merits of those claims aside, they can provide a useful reminder to review your coverage to check that your company is covered for pro bono, volunteer, or charitable activities. It is by no means certain that such activities are covered under your standard policies.

Certain professional liability policies, for example, only provide coverage for wrongful acts performed while providing professional services “for a fee.” Other policies might have other language that would allow your insurance company to argue that the liability or claim was not incurred in connection with your firm’s primary business activities. If you have such language in your policies, look for an endorsement or other provision that specifically restores coverage for unpaid, charitable activities.

Another related issue is coverage for spontaneous “Good Samaritan” activities. Firms that employ healthcare professionals, for example, might need an endorsement to cover the company, and individual employees, should those professionals provide emergency assistance to an accident victim. Such coverage might be advisable even if your company does not carry medical malpractice insurance because you are generally not in the business of providing medical or healthcare services.

If your company does have the proper coverage in place, the insurance claim process should be little different from claims relating to your company’s core business activities. As with all other claims, provide notice without delay, and hold your insurance company to the same standard you would with any other claim.