Helping Your Nonprofit Clients Weather a Hard Insurance Market
The insurance industry is in a hard market. As a result, policyholders may experience new coverage restrictions, exclusions or requirements, as well as an increase in premiums — regardless of their loss history. With nonprofit organizations already having to do more with less, the rising cost of risk management can only create more challenges. As a broker serving the nonprofit industry, it’s vital to be proactive to ensure that your clients secure the coverage they need at the right price. When working renewals, the following considerations can help.
- Submit applications as early as possible. It’s in each of your client’s best interests to submit renewal applications at least 90 days in advance of the policy expiration date. This provides underwriters with the time needed to properly review submissions and gives you the flexibility to go back to the table to negotiate coverages, rates and terms — should it be necessary.
- Review coverages, limits and exposures. Meet with clients to review their current insurance policy. Are there certain exposures that are no longer applicable? Can new exposures be addressed by an endorsement or policy rider? In some cases, it may be possible to safely increase deductibles to help reduce premiums. However, the Nonprofit Risk Management Center cautions organizations to be mindful of the fact that to cover claim costs associated with increased deductibles should a loss occur, it may be necessary to establish or adjust reserves — both of which will typically require board approval.
- Address risk controls. Hard market conditions can mean having to sell a carrier or underwriter on a risk. If you have clients with less-than-favorable claims activity, now is a great time to discuss how these risks are currently being proactively addressed. On accounts with multiple losses, take the time to explain certain claims situations so the carrier or underwriter better understands the issue and won’t automatically decline the submission. Lastly, discuss you’re your clients ways they can implement no- or low-cost risk management strategies, such as establishing a safety training for staff and volunteers or protocols for vetting individuals who drive on behalf of the organization (e.g., running motor vehicle reports every six months).
- Consider premium financing as an option. Premium financing may not be right for every organization, but for some, the ability to spread out insurance payments over several months can help relieve some of the financial burden in the event premiums spike. For some organizations, financing insurance premiums can also free up working capital, allowing them to invest funds into establishing new programs or services, or to purchase additional coverage that may be needed.
While there’s no way to predict just how long a hard insurance market may last, the good news is that it won’t last forever. The most important thing to remember is to be sure to maintain open communications with your clients, letting them know that you are here to help.
About Charity First
The incredible services that nonprofits provide come with unique and complex risks that are part of their everyday work in serving the elderly, children and other vulnerable populations. It is why Charity First is committed to providing our retail partners across the country with best-in-class underwriting, consistent and responsive service, and risk management services that include comprehensive cybersecurity coverage that can be customized to meet the individual needs of their nonprofit clients. To learn more about our cyber coverage or other products, please contact us at 800-352-2761 or marketing@charityfirst.com.