by Alicja
Grzadkowska 30 Jul 2020
The following is an
editorial by Alicja Grzadkowska, senior news editor at Insurance Business. To
reach out to Alicja, email her at alicja.grzadkowska@keymedia.com.
If the for-profit world of business is suffering
as a result of the coronavirus, you can imagine the toll that the pandemic has
taken on non-profit sectors around the world. Volunteering Australia noted that
the decline in volunteering during COVID-19, and specifically from February to
April this year, has been substantial, with 65.9% of volunteers estimated to
have stopped volunteering. Similar trends have been observed in other
countries, including Canada, the US, the UK, and across Asia-Pacific.
The impact of the pandemic has also been
reflected in the bottom lines of non-profit associations. Imagine Canada found
that almost three-quarters of surveyed non-profits reported that donations are
down, while a similar percentage of organisations in the US surveyed by La
Piana Consulting reported a drop in revenue.
To add to this challenge, it’s been getting
harder for non-profits and their devoted workers to find affordable and
appropriate coverage. Volunteers in Australia, for example, need coverage
more than ever, yet are facing more risks due to the lack of
appropriate coverage available to them since volunteer insurance policies are
unlikely to provide protection against coronavirus-related claims.
“It would be good to see the business sector
coming to the table via the Insurance Council [of Australia] or key insurers so
a creative solution is found,” said Sue Woodward, director at Justice Connect’s
Not-for-profit Law, in an interview with Pro Bono News.
This is a problem that likely will impact
volunteers across markets down the road, if they’re not experiencing these
issues already. In the US, for instance, insurance professionals have noted the
challenges that volunteers experience when trying to secure auto insurance
coverage, demonstrating the lack of appropriate solutions for this type of
activity that already existed before the pandemic hit.
Some industries have shown flexibility for
volunteers during the pandemic, with the Association of British Insurers (ABI)
noting in March that, “Volunteers who are giving up their time to help can rest
assured that they do not need [to] waste time on the phone to let their car
insurer know that they are using their car to do volunteer work.” However, as
the insurance marketplace at-large responds to the coronavirus by hardening
across many lines of business, the insurance-related hurdles facing charitable
organisations are likely to grow.
Midway through 2020, many larger non-profit
organisations have been facing difficulties securing adequate and affordable
D&O insurance coverage. Experts are also predicting that non-profits will
face more employment practices liability exposures due to furloughs and
lay-offs. “I think we all need to prepare to see a lot of employment-related
claims coming six months to a year down the road,” Ian Perry, underwriting
manager in AmTrust’s
non-profit division, recently told Insurance Business.
This situation is likely to look gloomier down
the road as the ripple effects of COVID-19 stay with us. During this time, it’s
critical that the insurance industry remains committed to offering solutions
for the non-profit space. Many carriers have shown their willingness to
continue taking part in charitable work and directing donations to various
organisations amid the pandemic, but without being able to access affordable
coverage that adequately protects them from risks, non-profits are going to see
more barriers to operating spring up, at a time of crisis when they’re needed
most.
In some cases, government and insurance industry
stakeholders will have to come together to ensure that the marketplace remains
welcoming to non-profit clients and their volunteers. To address the insurance
issues facing volunteers in Australia, the creation of an indemnity or
contingent liability fund that would feature insurer contributions has been
suggested, while in the US, there is a piece of legislation pending before the
House Financial Services Committee – H.R. 4523, Non-profit Property Protection
Act – which would allow well-established risk retention groups to provide
non-profit members with additional insurance coverages that traditional
insurers are now unwilling or unable to provide.
Brokers and agents can likewise do their part by
staying knowledgeable about the work of non-profits and their insurance needs,
as well as that of their volunteers. Imagine Canada recommends that non-profit
organisations take the time to understand their insurance coverage “rather than
just waiting to hear ‘don’t worry, you’re covered.’” Frontline insurance
professionals are that source of information and need to provide clear answers
on what’s covered and what’s not, especially considering the coronavirus
exclusions that are already popping up in policies.
By showing its commitment to enabling the
ongoing operations of the non-profit sector, the insurance industry can live up
to its goal of helping people and businesses in times of need, thereby
delivering on the promise of insurance.
Related stories:
https://www.insurancebusinessmag.com/au/news/columns/why-its-time-for-insurers-to-live-up-to-their-promise-229225.aspx?utm_source=GA&utm_medium=20200729&utm_campaign=Newsletter-Opener-20200730&utm_content=&tu=
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