Do Nonprofits Need EPLI for Volunteers? Understanding the Risks

Volunteers are often the heart of a nonprofit’s workforce, but they can also represent an unexpected legal risk. In many lawsuits involving nonprofits, it’s not just paid staff filing claims. Volunteers, who may work side by side with employees, can allege harassment, discrimination, or wrongful treatment. Courts increasingly recognize these claims under employment-related statutes.

That’s where employment practices liability insurance (EPLI) comes in. While many nonprofit leaders assume EPLI only covers salaried employees, it can and should extend to volunteers, too — especially when paired with comprehensive directors and officers (D&O) coverage.

Do Nonprofit Volunteers Need EPLI Coverage?

Yes, and in more ways than you might expect. Courts often view volunteers as “employees” for the purpose of harassment, hostile environment, or discrimination claims. This means your organization can be sued by, or because of, a volunteer — even if no wages are exchanged.

Consider this scenario: A long-time volunteer alleges they were removed from a leadership role after reporting misconduct. They claim retaliation and defamation. Even if the allegations prove unfounded, your organization still faces legal fees, reputational damage, and potential settlements.

Without EPLI that clearly includes volunteers, these costs could fall directly on the nonprofit — or even individual board members.

What Does Nonprofit D&O Cover?

Directors and officers (D&O) insurance protects your leadership from personal liability tied to management decisions. This includes employment-related actions like hiring, firing, and volunteer oversight.

However, D&O policies don’t always address the emotional and reputational complexity of workplace behavior claims. Together, D&O and EPLI create a critical layer of protection — especially for nonprofits with blended teams of employees, volunteers, and board members.

How Can Nonprofits Protect Themselves From Volunteer Lawsuits?

Start with a policy review. Not all EPLI policies are built the same, and some may exclude volunteers altogether. It’s also common for nonprofits to assume their D&O coverage will handle all employment-related claims, which isn’t always the case.

To avoid dangerous coverage gaps:

• Confirm volunteer inclusion in your EPLI policy.
• Check that your D&O and EPLI policies complement each other, especially around management liability.
• Work with a nonprofit insurance specialist like Moody Insurance Worldwide to ensure your policies match the way your team actually operates.

Protect Your Mission With the Right Insurance

Volunteer engagement is essential to nonprofit success, but it shouldn’t expose your organization or its leaders to unnecessary risk. EPLI, when aligned with nonprofit directors and officers coverage, offers powerful protection that supports accountability without fear of personal liability.

Moody Insurance Worldwide helps nonprofits identify where their insurance programs may be vulnerable and build policies that reflect the realities of mission-driven work. Contact us for a policy review and protect the people and purpose you depend on most.

FAQ on EPLI and Nonprofit Volunteers

Are volunteers considered employees for legal purposes?

Volunteers aren’t classified as employees if they serve without pay and without coercion. However, in some legal claims — especially those involving harassment or discrimination — courts may treat volunteers like employees, which is why EPLI coverage should include them.

What happens if a volunteer sues a nonprofit?

Without the right EPLI policy, the nonprofit may face the cost of legal defense, settlement, or judgments. D&O may offer some protection, but often it’s not enough on its own.

Can one policy cover both employees and volunteers?

Yes, but only if structured correctly. EPLI should explicitly include volunteers in the definition of who’s covered.

Is EPLI included in a standard nonprofit insurance package?

Not always. EPLI is often a standalone policy or optional endorsement. Nonprofits should verify what’s included and excluded in their coverage.

About Moody Insurance Worldwide

We are a specialized, independent insurance agency that provides broad insurance portfolio options for the nonprofit sector. In addition to essential Property, Liability, and Benefits insurance, we have expertise in Professional Liability, Product Liability, Director & Officer Liability, and International insurance coverage.