Q: We recently discovered that a volunteer at our non-profit has been stealing money from us over a long period of time. Can that be covered?
I run a non-profit that works with homeless animals in my town. We rely on the work of unpaid volunteers to accomplish our goals on a very tight budget. Recently, however, I discovered that one of our volunteers who helps handle adoptions has been stealing money for quite a while now. Will our insurance be able to help recover costs? How do we make sure we're protected in the future? Do I need business insurance?
A: Unfortunately, things like this happen more often than people realize. I’ve seen non-profit organizations almost wiped out because of employee theft and dishonesty. In this particular case, you are referring to theft by a volunteer as opposed to an employee, and that makes things a little tricky. As for whether or not you are covered—well, that depends on the type of coverage you have and how your policy was written.
Situations like this are where crime insurance comes into play. Crime insurance is designed to protect organizations from employee theft and other crimes. It can be purchased as part of a business insurance package or as a stand-alone policy; but be aware that when it is included as part of a business package, the coverage tends to be more limited.
Of course, as you probably noticed, I said that this coverage protects your businesses from crime committed by employees. I saw a case once where a business was robbed of $750,000 by a man who was doing contract work for them. Because he was not actually an employee of the business, this theft was not covered. Volunteers would typically fall under the same category of non-employees – but they don’t have to.
When you purchase your crime insurance coverage, be sure to speak with your agent about volunteers or contractors who may be working at your non-profit. Your agent can actually designate them as employees for the purpose of insurance coverage. Unless they are specifically listed this way, you will not have coverage if they steal money from your organization.