What advice would you give to small voluntary and community groups faced with hikes in their public liability insurance premiums?
The difficulties of the insurance market are having a serious impact in the third sector. Many charities are not only seeing their insurance premiums rise but in several cases are finding it difficult to find insurance at any price. The impact on smaller charities is often greater than on larger organisations since they often do not have the financial strength to absorb increased costs.
Insurers are very cautious about liability exposures, both public and employers liability, for operations that they perceive as being "high risk". This includes care-sector risks, particularly anything to do with children, and work where staff or volunteers may be involved in a hazardous environment.
It may also be difficult to find cover for high-risk fundraising events.
Insurers are looking now to write business on which they can expect to make a profit. This business is defined by them as cases where there is a strong culture of risk management and control coupled with evidence that the charity has put in place business continuity management to minimise the impact of any loss. Therefore practical risk management is a key link to insurance buying and a charity will improve its chances of obtaining insurance cover at an acceptable cost if it can clearly show that it is doing everything possible to identify and control risks.
The insurance market can be confusing and it is important to choose an insurer that not only provides cover at the right price but also understands both the sector as a whole and your own risks in particular.
An independent broker which has knowledge of the voluntary sector can be a valuable help since it will know the insurers which are most likely to provide the right cover at the right terms. It can also help you to present your circumstances and operations to potential markets in the right way and assist with the risk management process.
If you have a tight budget, it might be worth contacting other similar organisations to see what they have in place. Compare and take advice to see what is working. Then make a short list of two or three and contact them. This would mean you have a list of tried-and-tested companies.
But it is clear to me that the third sector as a whole needs to address this issue. Perhaps we should be negotiating sector-wide arrangements?