The Merriam Agency has been serving Rescue Missions since 1905. Speaking nationally, providing free consultation to AGRM members, and solving numerous problems, the Agency has earned the distinction of the exclusively endorsed strategic partner status since 2008.

Hidden Loopholes—Who is Covered?

A thorny question for missions—and one that requires an understanding of “hidden loopholes” in almost every insurance policy—is whether or not the mission’s insurance policy provides coverage for guests.

While most insurance policies provide liability protection (coverage against injuries and property damage of “others” that may be the result of the mission’s negligence), the question becomes who is insured versus who are “others”?

The good news is that most guests and volunteers may be considered insured, so that if they cause an injury to others, both the mission and those individuals will likely be defended against any ensuing litigation. The problem comes about when those individuals are the ones injured. An insured is not covered for their own injuries. It cannot be both ways; either a person is an insured or they are not (termed “others”). If they are an insured, then they enjoy protection against the injuries they cause. If they are not an insured, then they enjoy the provision of coverage against their injuries. After all, we are not allowed to sue ourselves and collect a settlement.

So are your guests “insureds” or are they “others”? Buried deep in the typical insurance policy is wording that provides coverage for others without any requirement to prove negligence, provided that the person does not “normally occupy the premises.” Since the term “normally occupy” isn’t defined, we must look to precedence, which has defined the difference based on whether the guest is in your emergency program (for a few nights’ stay), or is part of a long-term program (such as a six- month discipleship program). If it is the former, they don’t “normally occupy” your premises, and therefore are not insureds, so their injuries would be covered. But the latter do “normally occupy” your premises for the duration of their residency, and therefore are considered insureds. Their injuries would likely not be covered, unless perhaps they retain an attorney and successfully prove otherwise in court.

The solution to this problem is to obtain a stand-alone Accident-Health insurance policy that provides voluntary coverage for guests. This would resolve the residency problem and could even extend a much higher benefit for volunteers. Additionally, this can make it easier to obtain Workers Compensation coverage since many states consider guests who are volunteering at your mission as employees who are receiving room and board as their wages.

Brian H. Merriam, CPCU, ARM, AAI

376 Broadway
Schenectady, New York 12305

(877) MERRIAM x 201
(877) 637-7426 x 201

Send Email
Brian H. Merriam, CPCU, ARM, AAI

Latest posts by Brian H. Merriam, CPCU, ARM, AAI (see all)