Insurance implications : part 3
Effective and documented risk management can have a significant impact on the costs of insurance relating to the delivery of public services.
Some councils will allow charities to insure for lower limits of indemnity if they can show that they have been through a risk identification and management process prior to bidding for a contract. Not only can the charity save money through lower limits, but that very same risk management process and document(s) can be used to reduce additional premiums through discounting with underwriters.
As a matter of course charities should disclose their risk management strategies to their insurance provider to help their provider tailor their insurance programmes to suit the charity’s requirements. This could include an overview of what strategies and processes are in place such as Health & Safety policies (including regularity of review, name of person responsible, whether outsourced or not, etc), Business Continuity /Disaster Recovery Plans and Staff Training & Inductions. This information can, potentially, reduce your premiums and reduce the contractual requirements placed on you with regard to insurance.
Of course, you may already have the required insurance to deliver the contracts you are bidding for in which case, great! However, the challenge facing our smaller clients is that this is prohibitive cost-wise.
This being said, it is definitely worth charities of all sizes taking the time to consider the risks they are exposed to, and what their risk appetite is. Insurance providers will always recommend taking more insurance than less, but perhaps a considered approach to the issue where charities use their insurance providers for advice rather than simply the source of a cheap premium would be beneficial, that way your organisation can be assured of having the right cover, for the right price with the flexibility to meet the challenges of a changing (not for profit) business landscape.
In an effort to draw together some of the themes covered in this presentation, we believe it is important for charities to communicate with both their insurance provider and the organisation putting contracts out to tender. Only through regular and meaningful communication can you be assured that the risks your organisation is exposed to are managed and/or transferred appropriately. We would also encourage all charities to try to understand better the insurance products they are purchasing, and being asked to purchase. Many of the problems that arise with insurance programmes and contractual requirements could be mitigated by understanding what you have now and what you need to deliver a service.
Insurance Implications of Delivering Public Services was brought to you by ThirdSectorProtect. ThirdSectorProtect is the charity insurance division of leading independent insurance broker, NC Insurance and they work with ethical insurers in order to provide expert advice and highly competitive premiums to charities, social enterprises, community interest companies and community groups.
For more information, please visit www.ncinsurance.co.uk/thirdsectorprotect