CPP13 – Getting the best deal from your insurer

Welcome to the Charity Property Podcast designed to give not-for-profit organisations the insider know-how behind the bricks and mortar. I'm Antonia Switz and Chief Executive of the Ethical Property Foundation, the UK's number one property-advice charity serving the voluntary sector. Today is the first in a new series about getting the best deal for your charity's insurance. Hello, I'm delighted to be joined today fresh from a rainy Southampton by Jade Winter who's director of our new learning partner here at the Ethical Property Foundation and leading charity insurance brokers, Norris and Fisher. So Jade and delighted to welcome you to our first charity property podcast and obviously it's such a huge subject for every charity and I should say every July I sit down with my team and we go through the current insurance and we have to look at it and because of course we're in a property-advice charity. So we have not just professional indemnity for our property advisors, we've got all the usual employer liability, trustees, insurance and everything. So it is a very very big deal and one always wonders have I got the best deal and my under-insured is the Ethical Property Foundation over-insured and how do you get the Goldilocks perfect solution. So it's that time of year again. You're sitting there with your finance director or your chair. What are the key questions which every charity should ask when looking to renew their insurance? Well, it's quite a varied set of questions that you should be asking really. It just depends on what it is that you're doing. So the first thing you really should be looking at is whether your activities as a charity is covered under your insurance policy because regardless of whether you've got property or not, you're going to be doing some kind of activity and therefore you're going to have adequate cover. So you should be looking at your policy documents to ensure that all the activities that you are doing that you've been doing in the last 12 months that they're covered and then go from there really. After that, it's making sure that all of your assets are covered properly. The first thing is obviously going to be your building. If you've got buildings ensuring that is insured for the rebuild figure rather than the market value figure, which we sometimes get questioned on. And then otherwise it's things like your contents that you've got within the building and maybe taking into account anything that you might have bought in the last 12 months that you might not have fought to add on during the last policy year, but you should definitely make sure they're uncovered going forwards. That's the first thing that you should be looking at really in terms of the things. Is there extra cover we should now look at? For example, I don't know, I remember when when COVID with the first lockdown, we were looking at business interruption insurance, just checking we had it. What are the other insurances that one might need to take account of in terms of a charity, the things that you should be looking at always, especially if you've got buildings and contents is your business interruption cover. And therefore if you can't use your building and therefore you can't get any of your income from that source, then you are being reimbursed for income that you've lost. So be definitely looking at that. You should also be looking in your policy wording and speaking to your broker if you've got one to see what income definition they are using because your business interruption is going to be usually based on your income. And depending on if you've got cover for 12 months or 24 months, we would always recommend 24 months and therefore you need to have double the income covered there and a full casted projection rather than your last 24 months to cover you properly. And I suppose one thing that does occur to me is how does I always ask this, how does our policy that we we buy compared to others in the market. So how what's the best way of researching the charity insurance market, what's the best way of checking out the deals, the best deals because we don't, you know, we don't have a sort of, you know, it's not a magic wand for us in the charity world because we often have quite complex needs. I mean, it sounds like an obvious answer for me to give you, but I would always recommend speaking to a insurance broker who is specialises in the charity market because they will themselves know what it is that your needs are in terms of your policy. But they'll also be able to check the market for you so you don't have to rely on doing it yourself and looking out for these things yourselves. A good charity broker should have ample markets in front of them to go to and they can then let you know what they found across the market as well and you're not just relying on the one quote. Right. So the brokers aren't tied to a particular company that's the full gamut. So some brokers may have specialist schemes depending on what it is. For example, we ourselves have schemes for our village halls and we've got two schemes for those. But we've also got other charity markets that in the example of village halls, if you don't fit on those schemes, we've got other markets that you can go to. So I would always recommend a broker that can test the market for you and then you know that the broker understands your needs and has gone to all of the markets. So you've got available to them that will meet your needs. So what is the date by which you need to start looking say your policy rounds out on the first of July? When should you start checking out the market and checking out the best deals? I would say roughly about six weeks before your insurance is due for renewal. You should be getting renewal terms from your existing insurer around four weeks before, if not sooner. But I would always make sure that you're looking at that beforehand, because then you can go to your broker with any changes that you might have made in the last 12 months. And then they're also basing your renewal on any alternatives that they're getting on your updated information rather than wasting time and getting one quote and having to change it later. Because it is extraordinary, I mean, just in the last two years, the difference in say, for example, numbers of volunteers that we have here at the ethical property foundation or perhaps we've taken on more contractors who work for us as associate property advisors. And it varies, but it can be quite a difference depending on our fortunes. And so for any charity then, Jade, what are your top tips for keeping these insurance costs manageable? Because charity is always worried that they are seen as, what can I say, a soft touch, you know, they don't know anything much about other than the cause and the community. So what are the top tips for keeping the costs appropriate for size and reach? What I would say first of all, and the important things to look at is yes, it's really important and I understand for charities, it's especially important to be looking at the physical premium that you're paying, because that is going to be a big deal for a charity. However, before you start looking at anything, it's important to remember that you're hopefully getting value for that money and it's not just about the premium that you're paying, it's what actually else you're getting for that money. So the things that I would say to be looking at are review and your actual policy, like we've talked about already, making sure that all the things on there are covered as they should be, but also shop around for better deals, but don't sacrifice the cover for costs. And whether that's shopping around with your broker, or if you don't have a broker, you know, you're actively looking at other charity markets. Also looking for available discounts, because some insurers may give you discounts for risk management, or for video tools, hallmark awards and things like that. What are they? So for risk management, if you're doing good things in your charity building, for example, risk assessments can carry a discount or things like your health and safety, or things like, you know, fire prevention and things like that. Some insurers will give you a discount for each thing that you are doing, you know, to keep the property in a better state of repair. Well, that's really interesting, because one of our most popular webinars we run is how to do a risk assessment. Yes. And we know that we should have a risk assessment in case we make a claim, but I hadn't realised that it gets you a discount. It's always worth asking your insurers, your insurance broker, whether or not that you are qualifying for all discounts that could be on your policy. Because not all insurers will have the same discounts applied, or be able to be applied, but other ones do. So I know, for example, one of our insurers has about eight questions that you can answer yes or no to, and it carries a discount. It all just depends on the insurer. Oh, right. And also extra fees, additional fees. Yes. The sort of things you need to look at, and how do you compare broker's fees? So it's up to a broker really how much fee they're going to personally charge you. There's no set rule as long as they're declaring it to you than they're entitled to charge a fee. It might also be that the charity insurers themselves are also charging a fee on top of the broker fee. So it's just looking to see what fees are are being charged. One thing that, you know, we're regulators, one thing the SCA say is that people need to be in transparent with their fees. So you should be seeing the financial conduct authority. So you're so all brokers are insured are regulated by the financial conduct just like an insurance company would be insurance brokers are as well. So we've all got to abide by the same rules, which means that we're really hot on making sure we're doing the right thing and the best thing for our customers. But yes, so fees we need to be in transparent with them. Some brokers charge them some don't it's just seeing what it is that you're getting for the money. Right. And then I know in our next podcast we'll be talking about being under insured, but do you think some charities actually can be over insured if they're not careful. It kind of depends. You have policies which are sold to you where there are limits of cover that are given to you as standard, but that actually might not be the cover that you require. There's a lot of charities out there that might have 10 million pounds for the public liability, for example, but actually they don't need to have 10 million public liability. Both million would be adequate sometimes you get external parties that ask for certain figures, but I would just review the limits that you've got if they're set limits for like your liabilities, then if they can be reduced and you don't need them, then think about reducing them. But otherwise I wouldn't be cutting corners and definitely not on things like your buildings, your contents, your business disruption, they should be as is. I suppose people do worry that they're giving all the information without overburdening the broker with lots and lots and lots of stuff. So what sort of details are commonly sort of left out of insurance documents, not because anyone's trying to get out of anything, but because they don't think to include it. It's very hard speaking as a broker because a good broker should be asking all the questions that are necessary on an insurance policy. And like I say, that is why I would always recommend using a broker because they've got experience in the things that should be asked and they'll be asking the charity all the things that they need to be declaring. You've got to be careful if you do do it on your own because there could be lots of things that you're not declaring all of your activities. For example, your income might not be the definition that the insurers are expecting for your income and things like that. And that's why you've got to be very careful and know what it is that the insurers are expecting of you. But like you say, charities don't know all of this in all this stuff. They're not going to know all of this stuff and that's why you've got to focus there that can support you and help you with the things that you don't know. Great, because so often, quite even quite small charities can be quite complex. Yes. And have a different range of activities and services which can change from year to year and it can be driven by grants apart from anything else. Exactly. So, finally, Jade, common mistakes and how to avoid them. What are the sort of absolute no-nose that you see and that you always try to stop charities from sort of bare pits, from falling into them. The first thing is always going to be people looking at the price and not the covers. So, you might get a renewal that looks quite a big sum of money and you see a list of insurance covers that's covered on there. And you might not understand what those covers mean. So, you might think all to save money are to take those covers away. For example, Fidelity Guarantee, which is covering a bezelment. Cyber insurance is quite a new thing that you might think, people who don't need cyber insurance will remove that to get your price down. But actually, those are things that you should be being made aware of what it means so that you can make an informed decision rather than a decision based on you not actually knowing. So, that's the first thing I would say is don't sacrifice covers that you might need to get a better price. Secondly, I would be saying that failing to review your policies is going to be a mistake because you might not be covering yourselves for everything that you've got. And if actually you're not covering yourselves properly and not representing everything to the insurers, then if there was a claim, your policy might be void anyway. So, you need to be checking everything that you've got. And like I say, it's just ensuring that you're working with somebody that knows what they're talking about that can support you in case the worst happens and there's a claim. Right. Well, this is really interesting because insurance is generally thought by charities not to be terribly interesting. But my goodness, if you get it wrong, it can be a terribly, terribly big mistake. 100%. Obviously, as we get property advice and very, very often, well, not very often, thankfully, but we have had cases where trustees have thought they've cut costs only to find they are that uninsured or underinsured or, you know, and this property can be a real source of headaches. Well, the thing is is in terms of a more talk about it again in a minute, in terms of things like your property, it is a duty of a trustee to ensure that they're ensuring their assets and their property adequately. And if they are just trustees are cutting corners of safe prices and the claims not paid out because of that, actually there is a breach of duty for those trustees because they haven't insured that they're covering the property adequately, which is why it's so important as a trustee. I'm on looking after a charity that you're doing everything you can to get this right because you don't want to be involved in a claim for trustees and demnancy later on down the line because you've not done the insurance properly. Yeah, right. Well, that's excellent advice. Thank you very much. Thank you. Here we have words of wisdom from Jade Winter, who is director of leading charity broker, Norris and Fisher. Thank you so much, Jade, for joining me today. And my goodness has so much to learn, so thank you and this is the beginning of an interesting journey. I know, I'm very excited. Thank you. Certainly we're all having a challenging time managing costs in the voluntary sector. Thank you for listening. The Ethical Property Foundation is a registered charity working to help voluntary sector organisations across the country with their property issues. Visit our website www.propertyhelp.org. Big thanks to City Bridge Foundation, to Garfield, Western Foundation and finally to our learning partner, leading charity insurance brokers, Norris and Fisher, for making this podcast possible. Goodbye.