Edition 03/2001

Controlling Insurance Costs

Most in the sport and recreation industry are well aware of the increase in the cost of insurance for sport and recreation organisations.  Previous IEA Sports Monthly Updates have explained the methodology used by insurers in calculating insurance premiums.  This edition outlines the basic steps we recommend to achieve a sustainable program, and also puts forward questions we believe are appropriate for organisations to be putting to their insurance brokers.

Ten Steps To Follow For A Sustainable Sports Insurance Program

1. Implement a risk management program and culture into your organisation, with the goal being to implement actions that reduce the likelihood and consequence of undesirable events.  Insurance is the safety net that provides financial protection in the event of something going wrong.

2. Select and appoint an insurance broker, ensuring the broker selected has the appropriate knowledge, experience and qualification in the area of insurance and risk management specific to the requirements of sport and recreation organisations.  Your appointment decision should be influenced by the value the broker will add to the business relationship over and above simply sourcing and selling insurance cover.

3. In association with your broker, determine those risks exposures within the organisation to which the safely net of insurance is to be applied.  Ensure that your broker has provided for policy terms and condition that meet your requirements.

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4. Your broker should report back to you having accessed from the insurance market appropriate policy terms and conditions at the best price available.  You need to be satisfied that your broker has done the job effectively - ask questions, such as details of the various quotes received.

5. Via discussions with your broker, ensure that there are no policy conditions or exclusions that present problems.  Once satisfied in all aspects, instruct your broker to organise cover.

6. When policies are received, in association with your broker, review the wordings to ensure there is no unknown endorsements, exclusion or conditions.

7. For group insurance policies in particular, those covered under the policy should be aware of the benefits that are applicable.  Many sporting organisations have their members sign a declaration that they are aware of the cover provided and accept that cover, at the time of membership.

8. Maintain the insurance portfolio by remaining vigilant in regard to changes in circumstances, such as addition or disposal of assets that may affect sums insured, special events that may fall outside the current policies or require additional cover, etc.

9. Be proactive in ensuring that all claims made are genuine and incurred losses are minimised.  The amount of insurance premium to be paid will always be aligned to the amount of claims incurred.

10. Analyse all available data in regard to claims and injuries with the aim of extracting information that will aid in identifying strategies for reducing the likelihood or consequence of claims.  This will benefit not only the cost and availability of insurance, but will allow for a safer sporting environment for all participants.

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