The Charity sector has been at the forefront of the efforts to support society through the pandemic but the national lockdown and local restrictions have significantly hindered the sectors ability to fundraise. A variety of other emerging risks and a hardening insurance market are also on the horizon in the wake of Covid-19 so we caught up with David Erskine, who leads our Charity Sector Insurance team to get his views on what organisations can do to get prepared and be in the strongest possible position to face these challenges and risks.
2020 has been a year like no other. Every sector has been impacted and the Charity / Not-for-Profit sector is no exception. In particular we have seen organisations having to do more with less i.e. demand for services increasing whilst income that those organisations rely on being squeezed further.
Another emerging challenge is the ability to secure appropriate insurance protection to continue delivering your vital services. Securing that cover is becoming easier said than done! The insurance industry has seen the first significant hardening of the market in nearly two decades, showing no signs of abating and is yet another significant challenge that the Third sector is having to navigate through.
So, what does a hard market mean and how might this affect my organisation in 2021?
The insurance marketplace is a cyclical market where the rules of demand and supply are prevalent. It is also a global market and events such as natural disasters including catastrophic fires, flooding or a global pandemic have a significant impact. What affects the global market more often than not will filter down to the cost and availability of insurance cover at national and local level. Put simply, where premiums do not cover the cost of claims and expenses the market reacts and attempts to rebalance, losing its appetite to cover risk, resulting in less capacity and higher premiums to secure cover.
What actions can I take to help my organisation navigate through this challenging period in the insurance market?
Control the controllable. In the case of your organisation, this means it’s never been more important than now to consider what your risk profile looks like and how this is presented to the insurance marketplace in advance of your renewal date. Crucially that includes how your risk profile also compares to your peers. Insurers are becoming more selective in the risks they choose to write competitively.
At Griffiths & Armour we support our clients by providing practical guidance and tools to develop and proactively manage their risk profile. This process is ongoing but typically begins months in advance of renewal to ensure we start from a position of strength when negotiating cover on our clients’ behalf with the marketplace.
As a starting point, you should consider the following 8 tips for your organisation to help strengthen your risk profile:
- Have a robust risk management programme to protect staff, volunteers and third parties
- Insist on having good quality and detailed records throughout the organisation which are accessible
- Embrace on-line training which can demonstrate your commitment to managing risk throughout your organisation
- Keep up to date with changing regulations and guidance and document this accordingly
- Agree what support your broker can provide as part of their service proposition
- Investigate incidents immediately and report claims quickly to your broker
- Increase management awareness of potential claims
- What are the potential risks for your sector in the future? Take proactive measures to understand the claims trends of the future and build this insight into your risk management and resilience planning
With that in mind, our specialist charity sector insurance team recently delivered an insight led webinar to support our clients by sharing claims trends and legal expertise to help with their preparation for 2021.
The claims landscape for Charities / Not-for-Profit organisations is changing rapidly as we continue to make our way through the Covid-19 global pandemic. We partnered with BLM Law to provide guidance and advice to help organisations navigate the potential workforce challenges faced which included potential future claims relating to:
- Stress
- Lack of training
- Changes in procedures
- Manual handling
- Fraud
- Directors’ and Officers’ claims
If you didn’t get a chance to join us on the webinar a recording is now available for you to view below.
If you have any questions about the contents of this article or would like to discuss how Griffiths & Armour can help your organisation improve its risk profile, please get in touch with your Griffiths & Armour contact or get in touch directly with David Erskine, by clicking below.
