Huw Evans of CaSE Insurance came up with ten top tips. He suggests you read to the bottom because that’s where the stinger is…
1. Be open and honest with your insurance provider
An insurer cannot possibly ask enough questions about your insurance needs, and relies on you to disclose any material facts. The question, of course, is: what is a material fact? So be as open as possible with your insurer – put yourself in their place and try to tell them about the risks that concern you and how you deal with them. If they are specialists, they should be equally open and offer you advice on how to reduce risk and premiums.
2. ‘Sell’ your risk management
Make sure your broker or insurer understands how you minimise risk, as that will help them get you the best possible premium. If the insurer is convinced that you are managing a risk well, they will typically charge a lower premium or offer cover that they would otherwise withhold.
3. Specialist charity solutions work well
Always look for a specialist charity policy. Typically this will be a combined charity insurance policy, which gives the benefit of having all the cover you need in one place. Not only will it minimise your premium costs and avoid unwanted inter-insurer disputes but it will provide cover for abuse, treatment giving, volunteers, fundraising activities, working away from the office and other charity-specific issues not usually covered by a standard commercial policy.
4. Specialist schemes are good
If you are one of a group of similar organisations, check to see if there is a group insurance scheme that will give you the cover you need, e.g. parent teacher associations (PTAs) should look at PTA UK (www.pta.org.uk). A scheme is often the best option in terms of both cover and price as it gives the benefits of bulk buying, and someone will have considered the relevant issues.
5. Find a Charity specialist broker
Try and work with a specialist charity broker who understands the requirements of the sector, or look for a specialist charity insurer or underwriting agency (like CaSE!).
6. Do less
Some charities believe they are required to undertake annual tenders for their insurance and that they should get at least three quotes. In fact, there can be a benefit in having the continuity of the same insurance; reviewing your cover every three years is reasonable. Specialist brokers can advise on your cover and act on your behalf to get alternative quotes from the insurance market.
7. Take action after a claim
If you have had a claim and are looking to avoid paying much more at each renewal for the next five years, make sure you take action to avoid the problem happening again. If there was a break-in that led to a major theft of computers for instance, insurers will be much more understanding if you tell them you have, for example, barred the outside of the window that was smashed, added a new centrally monitored alarm system to the building and completely re-planned your data backup process etc.
8. Insurance is a process
Buying insurance should be the final stage of your Risk Management Process. In brief, the process should unfold as follows; look for risk, evaluate risk, create Risk Register, create Business Continuity Plan, create Insurance Specification, buy insurance.
Then you move into iterative mode… every quarter the management and board should search for new risks and review them and your risk register and other documents. Is it wrong to suggest a board should review risk once a quarter?
By the way we have recently published a free Guide to Charity Insurance, available on request from email@example.com which includes a more detailed explanation of the Risk Management Process (and lots more besides).
9. Is Insurance a Strategic Issue or not?
The board usually chooses your auditor and lawyer. But who chooses your insurer? Insurance often costs more than both and the impact of “bad buying” can be devastating. Yet all too often the insurance buyer has no part to play in the Risk Management Process and so has a very narrow focus and that focus is never on risk or cover, or claims management. It is always on price.
10. Not all insurance is the same
All too often charity insurance buyers place a huge emphasis on getting a low price and specifically on getting a lower price than last year. The policy wording is clearly being considered a commodity and interchangeable with any other policy. But take just one important issue, abuse.
There are currently two different ways to provide this cover. Some policies are “silent”; it’s not mentioned so it’s not excluded from your public liability cover. More policies now provide explicit abuse cover but they provide it on a “claims made” basis because such insurers (and we were one of the first) believe this gives better cover. There is not enough room to explain here the difference with the alternative approaches but if you deal with those at risk and you don’t understand this crucial issue you must talk to your broker or to us.
We have a one page explanation of the difference between these two approaches to abuse cover which we are very happy to provide free to anyone who emails us… firstname.lastname@example.org
For any insurance issues, please call us at CaSE Insurance. 0333 800 9838