Setting your insurance sights for the year
It can be an uphill struggle to sort out your charity's insurance, and especially so if you are trying to do this for the first time. The annual task might feel more like a mountain challenge than a gentle climb. And even if you are well established in your finance role within a charity, there are often issues that are easy to forget as your charity sets out for new heights. At the end of the day, your charity insurance policy is in place to protect the journey ahead.
Charities all want to protect people, assets and activities to the best of their ability. So let’s explore how we might approach this goal, with mountain climbing imagery.
Using map and compass
I happen to enjoy the Lake District mountains and peaks, and each walk presents new opportunities and challenges. And that is like insurance for charities. Each year, you make new plans and carry out your work. But are you ready for the journey?
Firstly, can you read the map? And do you have a compass? The insurance schedules and policy wordings we have are meant to guide us so we know what we have covered and what we have not, but often they can be confusing. It's better not to pretend we know what these things say if we are not sure. When you need to make a claim, you need to know that the piece of paper or email that contains your policy is fit for purpose.
When I first climbed a decent mountain I went with someone who could read the map and did have a compass. The result was I made it. And here is where an insurance broker can be your guide, someone who can explain all of those unusual words that often need explaining. Let’s face it, insurance, like many walks of life is riddled with jargon. A broker can help you read the map and know how to use the compass. So if in doubt, don’t be embarrassed to ask what things mean. More on keeping in touch with your broker later on.
Pressures on decision makers
Now you might have a really good broker, but there are still pressures we need to admit to.
Treasurers and finance officers are often tasked by charities to get the best deals for their charities, and premium reduction can almost be the sole purpose of this process for many. Well, we all want a good deal don’t we?! But be careful.
Just as you don't want a map with insufficient detail or landmarks, neither should you aim for an insurance policy that is not as comprehensive as you might need it to be. Your broker can help explain any technical terms with regards to what cover you have or possibly need. Then you are in control over what you decide is the necessary course of action.
In very practical terms now, the areas that one often finds ignored or glossed over by charity finance officers relate to buildings insurance (does anyone in your charity really know the true accuracy of the rebuild costs of your building?). Then there is business interruption cover (this is a misunderstood cover due to there being varied options), and there is also trustee Indemnity cover (and whether you believe it is needed).
I could name more, but these examples highlight that it’s tempting to lower the sums we insure, or tempting to assume we don’t need other covers that could be key to a charity’s survival if, say, a fire destroyed your buildings, or if trustees made errors that led to claims against individuals.
Other aspects of the journey
So we are thinking about what we need to consider for the year ahead. But insurance is also about people. Let us think about the clothing and equipment we need for the climb. Often the simplest thing is to think, "I know what I need and I'll just take the same as my last walk." Well, you might be lucky and be OK. But you might not. Every walk is different. And every year your charity will probably change or grow in some way or another.
When you are making decisions for your charity you are in effect thinking of more than yourself climbing that mountain. You are thinking of others too. How will you protect them? What are their needs? And here is the point. Have you gathered information about your charity from a number of people in your charity before taking out the insurance for another year?
Have your assets grown or shrunk? Do you have new activities, staff or volunteers? And what do they do? Are you partnering with other agencies? Are you carrying out changes to buildings or the use of them? Have your security features been enhanced? Have you bought any new equipment?
These are just a few questions you might consider before your policy is renewed. It can seem cumbersome, but your insurer needs these details to make sure your policy is robust and accurate. Indeed it means the premium is rated correctly and you get the right cover. Let’s face facts - you want insurers to pay claims, and rightly so. But they want to know what mountains you are walking on!
A companion whilst you travel
Finally, slightly changing the idea of a single walk, think about a whole year of adventures. Instead of an annual assessment, think about your insurance policy as a living document that needs updating as the year progresses, especially if your charity makes changes to its services or personnel etc through the year. Your broker will be delighted to hear from you at any point in the journey.
Think about what brokers can help you best, and who will give you their advice and services for free throughout the duration of your policy. Some charities insert a regular agenda item into their trustee meetings to ensure that all new developments are thought through, and any contact needing to be made with insurers, professional bodies or regulatory authorities is carried out before the trustees meet again.
This approach avoids the risk of people or activities being uninsured, and encourages an all year round relationship. Sadly this is rarely the case. Don’t wait for your broker to contact you. Pick up the phone and talk, and make sure you protect your charity as the year unfolds.
Enjoy a safe journey
So what have we learned? Hopefully that a better understanding of the map and compass is vital, that you need the correct clothing for the journey for you and others, and that continued help for the journey ahead means you can set out with confidence. And likewise, with a better knowledge of your insurance policy, and a true consideration of your charity's needs, you can focus on what really matters to your charity.
It’s good to have peace of mind that your people, assets and activities are properly protected for the year ahead. Let's enjoy the mountain tops, and a safe journey whilst we are there.
