After the last year, charities, churches and other organisations are re-evaluating their activities, adapting to flexible working and looking for sustainable and efficient ways to operate. Post-pandemic, there are several considerations that charities face in managing risk and reviewing their insurance:
Cutting costs
We are seeing many charities seeking to cut costs; sometimes, this comes in the form of taking out leaner insurance programmes that only provide the essential covers needed; without some of the optional covers they might have opted to purchase before the pandemic.
However, charities should be careful when considering dropping covers to cut costs as there could be implications. For example, trustee and professional indemnity cover work on a 'claims made' basis – a claim is made on the policy currently in force (not on the policy in force when the incident happened). Removing this cover removes protection for all the previous years covered by the policy.
Remote Working
Having a remote workforce means charities will want to review their insurance for office equipment, possibly widening the cover to include risks such as theft of laptops from employees' homes.
A small number of charities, having successfully moved to fully remote working, are exploring the possibility of continuing this on a long-term basis and hiring staff based overseas. They see additional benefits in having access to a wider pool of talent, coupled with the possibility of lower-wage roll costs. Of course, with this approach comes a range of operational and risk considerations – including the need to purchase employers’ liability insurance locally.
Events
Charities need to be aware of the financial risk of organising in-person events with a medium-large planned attendance, which could be cancelled or restricted due to changing government regulations. Within the current climate it is impossible to purchase event cancellation insurance that would cover the cancellation or postponement of an event due to Covid-19. Without this option, organisations cannot rely on the key financial protection they have previously had when organising such an event. For this reason, some charities are opting to put off any event planning for 2021.
Others have already moved to completely digital events. A number of organisations are planning events in conversation with venues but without entering into contracts to formally book the venue or equipment, until there is more clarity on whether the event will proceed. They will want to review what cover will be required going forward.
Buildings
Insurers have generally been willing to be more flexible than normal with contract terms and obligations because of the pandemic and lockdowns/tier system. For example, many insurers have waived or relaxed stringent policy conditions that would normally apply to buildings that become unoccupied. In this situation, you should report changes to your insurer and speak to your insurance adviser to see if the insurer will agree to more flexible conditions.
Travel & Medical
Insurers are taking different stances on liability cover as policies are renewed, with some adding blanket Covid-19 exclusions and others making no amendments. On travel policies, some insurers will still provide full Covid-19 related medical expenses cover for employees travelling abroad while excluding trip cancellation claims related to the virus. In the Care sector, insurers are very nervous, and the market and capacity have contracted significantly, with some commentators suggesting that some aspects of the exposure will have to be picked up by the Government.
Daily Operations
Many smaller charities, particularly those with a local focus, have either increased their work in the community or extended their activities to help vulnerable people who have been affected by Covid-19. With this work comes additional risk and these organisations need to ensure they have adequate insurance and risk mitigation measures in place to counter the 'normal' risks associated with these activities, as well as the additional risks brought on by the pandemic.
Standard measures to be taken include ensuring that risk management policies are in place to protect children and vulnerable adults and lone workers. Existing policies should be reviewed in light of the new risks that Covid-19 presents.
What actions should you take?
Essential information which determines the cost of a policy should be shared with insurers as soon as possible. This includes projected income, wage roll figures, occupancy of buildings and any change in activities. Take advice from your insurance specialist to assess the suitability of your insurance cover and whether any flexibility can be agreed upon with the insurer.
In addition to the above, review risk management policies to reflect changes like the outlined in this article to ensure they are fit for purpose in the current climate. Charities can make good use of the variety of widely available resources when doing this work.
