Volunteer Liability and Insurance Priority under Risk Retention Group Policies: Defining “Insured” Status and Co-Excess Coverage in County of Ulster v. Alliance of Nonprofits

Introduction

The Second Circuit’s summary order in County of Ulster v. Alliance of Nonprofits for Insurance Risk Retention Group, 24-1598 (2d Cir. Apr. 7, 2025) addresses two interrelated insurance-coverage questions arising from a tragic automobile collision. In January 2018, a volunteer driver in a county-sponsored senior transportation program lost control of her vehicle and collided with a county bus, killing the driver and injuring her passenger. The County of Ulster sought a declaration that the Risk Retention Group policy issued by Alliance of Nonprofits for Insurance Risk Retention Group (“ANI”) covers the County’s liability in the underlying personal-injury suit. ANI counterclaimed, arguing that neither the volunteer nor the County qualified as “insureds” under its policy and that its policy, in any event, is co-excess to the County’s separate municipal insurer. On cross-motions for summary judgment, the district court largely sided with the County; the Second Circuit has now affirmed in part, vacated in part, and remanded.

Summary of the Judgment

In a brief but thorough analysis, the Court of Appeals held:

Insured Status. The volunteer driver was acting under a written “Agreement for Professional Services” between the County and Jewish Family Services (JFS). Under an endorsement to the ANI policy, volunteers driving vehicles they do not own are “insureds.” The endorsement stands on equal footing with the policy’s base definitions, so the volunteer is indisputably an insured. By virtue of her status, the County—for whose liability the volunteer bore responsibility—also qualifies as an insured under the policy’s “liability for conduct of insured” clause.
Priority of Coverage. The County carried a separate auto-liability policy issued by New York Municipal Insurance Reciprocal (“NYMIR”). Both policies contain nearly identical “other insurance” clauses, except that ANI’s policy is “primary” only for liability “assumed under an insured contract.” Because the County’s coverage under ANI arises from its status as an insured, not from any indemnification obligation under the JFS contract, neither policy is primary over the other. They stand as co-excess insurers.
Disposition. The Second Circuit affirmed the district court’s conclusion that the County is an insured under the ANI policy. It vacated the finding that ANI’s policy is primary to the NYMIR policy and remanded for further proceedings consistent with co-excess allocation.

Analysis

1. Precedents Cited

Byrne v. Rutledge (623 F.3d 46): Reiterated the summary judgment standard in the Second Circuit—no genuine dispute of material fact and entitlement to judgment as a matter of law.
EMF General Contracting Corp. v. Bisbee (6 A.D.3d 45): Outlined New York’s abandonment-by-conduct doctrine, requiring mutual, unequivocal, and inconsistent behavior with contractual intent.
Goldman v. White Plains Center for Nursing Care (896 N.Y.2d 173): Confirmed that clear and unambiguous written agreements are enforced according to their plain terms.
Sport Rock Intl., Inc. v. American Casualty Co. (65 A.D.3d 12): Explained that when two policies cover the same risk, “other insurance” clauses determine priority or allocation of coverage.

2. Legal Reasoning

The court’s reasoning unfolds in two steps:

Defining “Insured” under the ANI Policy.
- The base policy defined “insured” to include the named organization (JFS) and anyone using a JFS-owned auto with permission, plus a catch-all for those liable for an insured’s conduct.
- An endorsement expanded “insured” to “anyone volunteering services to [JFS] while using a covered auto [JFS] does not own” to transport clients in the course of JFS’s business.
- The district court—and now the appellate court—concluded the volunteer was acting under a written collaboration agreement between the County and JFS. That agreement expressly identified driver volunteers as JFS’s volunteers, delegated recruitment, training, licensing, insurance, and reimbursement to JFS, and required JFS to maintain insurance.
- New York contract law principles (Goldman; EMF General) preclude finding abandonment. The parties renewed the agreement days before the accident, and JFS continued fulfilling its obligations unequivocally.
- Once the volunteer is an insured, the County falls within the policy’s section extending coverage to anyone “liable for the conduct of an insured.” The endorsement’s insured definition is on par with the base policy’s categories, so the County’s status does not turn on any external indemnification claim.
“Other Insurance” and Policy Priority.
- Both the ANI and NYMIR policies apply to the same auto-liability risk. Under Sport Rock Intl., “other insurance” clauses govern which policy pays first or how to allocate losses.
- The ANI policy’s “other insurance” clause includes a carve-out making it primary for liability “assumed under an insured contract.” The County is not relying on any contractual indemnification from JFS—its coverage arises directly from the policy’s insured definition.
- Because the ANI policy’s primary-for-contractual-assumption exception does not apply, the policies are co-excess: each shares liability for covered losses on equal footing once primary coverage (the volunteer’s personal auto policy) is exhausted.

3. Impact

This decision will affect municipal entities, nonprofit risk-retention groups, and their insurers nationwide:

It underscores the importance of clear policy endorsements defining “insured” to encompass third-party volunteers engaged in programmatic activities.
Agencies collaborating through written service agreements should confirm which party maintains insurance, how volunteers are classified, and how inter-policy disputes will be resolved.
Insurers drafting “other insurance” clauses may revisit their primary/excess triggers—particularly carve-outs for assumed contractual liability—to ensure they operate as intended.
Future litigants will rely on this framework to resolve coverage disputes involving risk-retention groups and overlapping municipal policies.

Complex Concepts Simplified

Risk Retention Group (RRG): A mutual insurance structure formed under federal law to enable similarly situated organizations (often nonprofits) to pool risk.
“Endorsement”: A written modification to an insurance policy that adds, deletes, or changes coverage terms.
“Other Insurance” Clause: A policy provision that addresses how multiple insurance policies covering the same risk share payment responsibilities.
“Assumed under an Insured Contract”: Liability a party expressly takes on through a separate contractual commitment, triggering primary coverage under certain policies.
“Summary Order”: A streamlined appellate decision without precedential effect, permitted by Federal Rule of Appellate Procedure 32.1.

Conclusion

County of Ulster v. Alliance of Nonprofits clarifies two pivotal insurance questions in the context of volunteer-driven public programs. First, it affirms that a well-crafted endorsement rendering third-party volunteers “insureds” pulls the sponsoring governmental entity into coverage through the policy’s liability-for-insured-conduct clause. Second, it demonstrates that “other insurance” clauses centered on “assumed liability” carve-outs do not apply when coverage flows from the policy’s own insured definitions—leading to co-excess responsibility. Together, these principles guide municipalities, service agencies, and insurers in structuring collaborations and crafting insurance language that delivers predictable protection when volunteers drive in furtherance of public and nonprofit missions.