Although volunteers might not be paid, from a workers'compensation perspective they might be better called “workers.”

State laws vary widely on the insurability of volunteers underworkers' compensation. Some states do not allow it, while othersspecify that certain types of volunteers must be covered and othersmay be covered at the option of the organization for which theyvolunteer.

But workers' compensation coverage can be expensive, especiallyfor nonprofit organizations that depend on volunteers but whosebudgets are tighter than ever before. As the weak economytranslates to declining financial support and sharper competitionfor fewer available grants, nonprofits are looking for every waypossible to reduce their expenses, including what they must pay forinsurance.

One way agents and brokers can serve their nonprofit clientsover the long haul is to help them identify the best options forinsuring their unpaid workers—the volunteers who are such avaluable extension of the nonprofit's human resources.

In evaluating options, a number of factors can be considered.For example:

• How broad is each type of available coverage?
• What is the cost?
• What is the perceived value to the volunteer?
• What is the risk exposure, based on the work volunteers dofor the organization?

Where workers' compensation coverage is available to volunteers,it can be tempting for the agent to recommend that option. Withno-fault coverage and unlimited benefits, workers' compensationprovides broad coverage, and many agents believe broader is alwaysbetter.

But to a cost-sensitive nonprofit executive, broader coveragemight have no value if the perceived risk of volunteer injury islow, and a lower-cost option might have considerable appeal. Thatis why accident medical insurance should be considered as analternative way to protect volunteers, even if workers'compensation is available. Larger nonprofits have been ableto reduce their insurance expense by several thousand dollars ayear by choosing accident medical rather than workers'compensation. In this economic climate, that kind of cost savingscan make the difference between keeping the organization's doorsopen and having to cease operations. And it can make the insuranceprofessional a hero for helping the nonprofit or social servicesorganization better use its resources.

The following chart shows a snapshot of the distinctions betweenworkers' compensation and accident medical insurance. And thesechoices are different—this is a true “apples to oranges”comparison. But helping the client choose between apples andoranges is how a good agent serves his client's interest, becomes atrusted advisor, and increases his chances of keeping the clientwhen other agents try to take away the business.