(a) For the purposes of this Code section, the term "nonprofit agency" means a nonprofit or charitable organization, association, corporation, partnership, or other entity.

(b) Nonprofit agencies and their employees, which agencies have contracted with the Department of Human Resources to furnish certain services to the mentally retarded or have subcontracted with similar nonprofit agencies for the same, shall be provided protection against personal liability for damages sustained by third parties arising out of the provision of authorized services to the mentally retarded by an employee of such agency during the course of such person's employment with such nonprofit agency. The commissioner of administrative services shall prescribe the terms and conditions under which such nonprofit agencies and their employees shall be covered by any liability insurance policy or contract of indemnity or similar program administered by the commissioner pursuant to this article to provide such protection, provided the cost of such insurance, indemnity, or similar program furnished to any such nonprofit agency and its employees shall be allocated to and paid by such agency.