How much do you know about your organization’s insurance portfolio? What sort of value are you getting? For those who may respond with a shrug, Scott R. Konrad, senior vice president and not-for-profit business practice leader at HUB International Northeast Limited presented “10 Practical Tips to Sharpen Value in Your Nonprofit’s Insurance Portfolio” at the 2015 Risk Summit.
Konrad’s tips included:
* Consider the big picture. Calculate the total cost of risk from a variety of different sources including non-covered claims, payments exceeding available insurance, workplace inefficiencies, declining morale and loss of reputation and funder confidence.
* Think strategy first and insurance last. First look at the risks your organization faces, their frequency, severity and worst-case impact. Then consider means of avoiding and reducing risk before evaluating transferable and retainable risks.
* Think outside the box. Nontraditional risks are seldom covered by traditional insurance. Emerging risks include sexual misconduct and professional liability.
* Sweat the details. Understand what you are buying and read the fine print. No two policies are created alike. Common traps to consider include liability coverage for individuals in non-owned vehicles, inadequate crime protection, professional services exclusions and exclusions and limitations to water damage coverage.
* Avoid bidding out insurance. Broker selection allows for a single broker to represent organizational interests and promote a consistent message in the marketplace. Marketing, on the other hand, is capable of fragmenting the marketplace and emphasizes going-in price over long-term risk costs.
* Start early. Begin insurance portfolio planning 120 days in advance. Communicate continuously with your broker, allowing time for insurer analysis and minimize opportunities for timing-related excuses.
* Showcase your organization’s strengths. Share your internal risk management infrastructure, corporate safety initiatives and lessons learned from prior claims.
* Meet your underwriter. You’re the best at telling your story and strategic partnerships will prove valuable through market cycles.
* Treat your broker as a partner and extension of your team, not a transactional intermediary. Give your broker a seat at the table when discussing new ventures, contracts, operational changes and shifts in strategic direction.
* Know the deal. You can’t assess the value of a service without understanding its costs. Insist on complete operational and financial transparency.
As we celebrate our 36th year, NPT remains dedicated to supplying breaking news, in-depth reporting, and special issue coverage to help nonprofit executives run their organizations more effectively.