Volunteer Coverage and Policy Priority: County of Ulster v. Alliance of Nonprofits

Introduction

County of Ulster v. Alliance of Nonprofits for Insurance Risk Retention Group (2d Cir. Apr. 7, 2025) presents a dispute over whether a county is an “insured” under a Risk Retention Group policy when a volunteer driver—jointly engaged by a nonprofit agency and the county—causes an accident, and how that policy stacks with the county’s own insurer. The case arises from a tragic 2018 collision: Barbara Hyde, driving a senior through the County’s transportation program, lost control and collided with a County-owned bus, killing herself and injuring the passenger. After the passenger sued in state court, the County sought a federal declaratory judgment that the Nonprofits’ policy (the ANI Policy) covered its liability; ANI counterclaimed to deny coverage. On cross-motions for summary judgment, the district court held that the County was an insured under the ANI Policy and that the ANI Policy was primary to the County’s municipal policy. The Second Circuit affirmed in part, vacated in part, and clarified both holdings.

Summary of the Judgment

The Second Circuit’s summary order resolved two principal issues:

1. County as an “Insured” under the ANI Policy: The court held that, by virtue of an Agreement between the County and Jewish Family Services (JFS), Hyde was a JFS volunteer driving under an endorsement in the Risk Retention Group policy. That endorsement extended insured status to JFS volunteers using non owned vehicles for agency business. Because the County was vicariously liable for Hyde’s conduct, it too qualified as an “insured” under the policy’s catch-all clause.
2. Priority of Coverage: Although the district court had deemed the ANI Policy primary over the County’s municipal insurer (NYMIR) by reference to an “insured contract” endorsement, the Second Circuit concluded that the County’s insured status under the policy itself meant that neither policy assumed liability under an “insured contract.” Consequently, both policies stand as co-excess to Hyde’s personal auto coverage.

Analysis

Precedents Cited

• Byrne v. Rutledge (623 F.3d 46, 52): Standard for reviewing summary judgment—de novo review of legal questions and confirmation that summary judgment is proper when no genuine dispute of material fact exists.
• Goldman v. White Plains Center for Nursing Care, LLC (896 N.Y.2d 173): New York rule that a clear and unambiguous written contract must be enforced according to its plain terms, without resort to extrinsic evidence.
• EMF General Contracting Corp. v. Bisbee (6 A.D.3d 45, 49-50): Defines the elements of contract abandonment by conduct—requiring mutual, positive, unequivocal actions inconsistent with an intent to be bound.
• Sport Rock International, Inc. v. American Casualty Co. of Reading, PA (65 A.D.3d 12, 18): New York approach to “other insurance” clauses—coverage priority among overlapping policies is determined by comparing their respective clauses.

Each precedent shaped the court’s analysis. Byrne set the standard of review; Goldman and EMF guided the interpretation of the volunteer services agreement; and Sport Rock governed the resolution of the competing “other insurance” provisions.

Legal Reasoning

1. Who Is an “Insured”? – The ANI Policy’s Business Auto Coverage insures “all sums an ‘insured’ legally must pay” for bodily injury. The policy’s “Who Is an Insured” section lists three categories:
   • (a) the named nonprofit (JFS),
   • (b) anyone driving a JFS-owned or borrowed vehicle with permission, and
   • (c) anyone vicariously liable for the conduct of those insureds.
   – An endorsement expanded (b) to include “anyone volunteering services to JFS while using a covered auto [JFS] doesn’t own, hire or borrow….” The key question: Was Hyde a JFS volunteer or a County volunteer?
2. Contract Interpretation: – The “Agreement for Professional Services” between the County and JFS required JFS to recruit, train, license, insure, and manage volunteer drivers for the Senior Transportation Program. JFS alone bore administrative duties and maintained insurance. – Under Goldman, the written Agreement was unambiguous: the “Agency’s volunteers” were JFS volunteers, regardless of overlapping roles. – ANI’s claim of County abandonment of the Agreement failed—there was no unequivocal, mutually inconsistent conduct; the parties renewed the Agreement soon before the accident.
3. County as a Vicarious Insured: – Once Hyde was an “insured volunteer,” subsection (c) covered “anyone liable for the conduct of an insured described above.” The endorsement was part of the same “Who Is an Insured” clause. The County’s liability for Hyde’s negligence thus made it an insured under the ANI Policy.
4. Priority of Coverage: – The County’s automobile liability policy (NYMIR) and the ANI Policy both contain “other insurance” clauses. Each policy is “excess” over any other valid coverage, unless it qualifies as “primary” under a specific exception. – The ANI Policy’s exception for “liability assumed under an insured contract” was inapplicable: the County was covered by the policy’s insured definition itself, not by assuming liability under a separate contract. – Therefore, neither policy trumps the other; both attach as excess layers above Hyde’s personal auto insurance.

Potential Impact

This decision clarifies two critical insurance principles for nonprofits, municipalities, and Risk Retention Groups:

• Volunteer Coverage Endorsements: Nonprofits that engage volunteers through formal agreements can rely on risk retention group policies to cover volunteers—even in multi-party collaborations—so long as the agreement unambiguously defines the volunteer relationship and the policy endorsement tracks that definition.
• Co-Excess Stacking: When an insured qualifies under a policy’s “Who Is an Insured” clause rather than by assuming liability through a separate contract, “other insurance” clauses will typically render overlapping municipal and nonprofit policies co-excess, rather than elevating one policy to primary status.

Future litigants and insurers will need to pay close attention to the precise language of volunteer agreements, policy endorsements, and “other insurance” provisions to predict the layering of coverage.

Complex Concepts Simplified

• Risk Retention Group (RRG): An insurance pool formed by similarly situated entities (e.g., nonprofits) to self-insure shared risks.
• Endorsement: A written amendment to an insurance policy that adds, modifies, or restricts coverage.
• “Other Insurance” Clause: A provision dictating how coverage from multiple policies is allocated—whether one policy is primary (pays first) or excess (pays after another policy).
• Vicarious Liability: The legal principle that an entity (like a county) can be held responsible for the wrongful acts of its agents or volunteers.

Conclusion

County of Ulster v. Alliance of Nonprofits reinforces two important tenets: first, that clear, tailored endorsements in a Risk Retention Group policy will extend coverage to volunteers operating under a nonprofit’s auspices, and second, that the manner in which an insured comes within a policy’s ambit—by definition versus by contract—is critical to determining policy priority. Municipalities, charities, and their insurers should carefully craft and review volunteer-service agreements and policy language to ensure predictable coverage and stacking in the event of a claim.