24 april 2014 richard doubleday managing director, sport and recreation perkins slade ltd finance...
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24 April 2014Richard Doubleday
Managing Director, Sport and RecreationPerkins Slade Ltd
Finance & Governance ForumUnderstanding and Managing Risk
Sport specific Risk Management and Legal Liability
• Review of claims – what happens when a risk goes wrong?
• Consequences– From an insurers’ perspective
• Practical Risk Management examples– British Gymnastics– Lawn Tennis Association
• Protecting your sport– Liability insurances
Review of sports related claims• There are representatives from approximately 30 National Governing Bodies
here today. Of these, at least:– Two have had one or more claim(s) for damages, settled in excess of £5m– Two more have claims, currently reserved at more than £1m– Two more have claims, currently reserved at more than £250,000
• Just because your sport is ‘low risk’, please do not think you are safe from a potential “catastrophic” loss:
– In 2013, £5m damages was paid to an individual, as a consequence of an injury arising at a barbeque!
Review of sports related claims cont’d• On behalf of a number of National Governing Bodies, Perkins Slade has recently
settled or is handling claims in relation to:– Corporate Manslaughter– Child Abuse (1 sport £870,000)– Repetitive strain injury (gradually occurring)– Disability Discrimination (membership of an NGB)– Breach of Human Rights (membership of an NGB)– Injury to a ‘volunteer’ at a National Championships– Libel and Slander (NGB Chairman to a Board member)– Contract Liability (three major clothing manufacturers)– Data Protection (inappropriate use of personal information)– Employment Practices Liability (senior member of NGB staff)– AND THAT IS JUST THE TIP OF THE ICEBERG!
Review of sports related claims cont’d
• At any one period of time, the Perkins Slade Claims Team is handling:– More than 5,000 incident notifications– More than 1,500 ‘live’ claims
• We know two things for certain:– Every so often, there will be a catastrophic loss– We have absolutely no idea, where it will come from
• WHAT EFFECT WOULD AN ADVERSE CLAIMS EXPERIENCE HAVE ON YOUR SPORT?
Underwater Tiddlywinks Association
• Renewal – October 2014– 40,000 members (premium £2.50 per person)– Been with the same insurer since 2005– 3 year Long Term Agreement coming to an end– Large loss in 2011/12 (£955,000)– Significant increase in claims notifications in 2012/13 and 2013/14 (part year)– Sport is generally considered to be well run, well regulated, well controlled– Did not perform well in the 2012 Olympic Games and participation figures have not hit
targets. Exchequer funding reduced by £100,000 per annum– Has significant financial challenges!
Underwriting InformationYear Net Premium
£Claims Paid
£No Claims o/s No Total Paid/ Reserved
£
2009/10 105,000 58,000 3 - - 58,000
2010/11 105,000 68,000 7 - - 68,000
2011/12 100,000 985,000* 3 57,000 5 1,042,000
2012/13 100,000 22,000 2 80,000 11 102,000
2013/14 100,000 26,000 2 45,000 5 71,000
Total 510,000 1,159,000 17 182,000 21 1,341,000
*Includes one large loss at £955,000
Underwriting StrategyWhat would be the premium for 2014/15?
– Previous 5 year claims ratio (2004-2009) 61%– 2013/14 - 6 months only
Underwriting Strategy• Not including large loss
4 years @ £315,000 = £315,0001 year @ (6 months x £71,000) = £142,000
5 year average = £ 91,400
• Add claims inflation @ 10% = £ 9,140• Add large loss provision £1m over 50 years = £ 20,000
Sub Total = £120,540
• Add insurers administrative costs @ 19% = £ 22,9022014/15 net premium = £143,442
• October 2014 premium per member £3.57
Question• What can be done to improve the risk?
(Ideally, what could have been done by the Underwater Tiddlywinks Association prior to 2011/12)
– Proactive measures• to minimise the risk of injury
– Robust procedures• to defend Civil Court actions
Case Study 1• British Gymnastics
– Challenges• Large losses• High volume attritional losses• Claims against coaches
• Solutions– Fewer ‘recognised’ environments– Fewer ‘recognised’ activities
– Managing The Risks of Coaching
British Gymnastics – Managing the Risks of Coaching
• Online resource– Health, Safety and Welfare Manual
• Accredited Training Programme– Evidence of competance
• Records maintained by British Gymnastics– Used by 25% of coaches
Case Study 2• Lawn Tennis Association
Challenge– High volume attritional losses– Claims against clubs (volunteers)
Solution– Online Risk Assessment Tool
LTA Risk Assessment Tool• Compulsory for all clubs since October 2013 (unless they self declare)
• Based on the HSE Model
• Creates a practical Risk Assessment
• Record maintained by the LTA
– No risk assessment – no insurance!
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
LTA ONLINE RISKS ASSESSMENT TOOL
Defence of ClaimsClub members who tripped over pot holes in their clubs’ car parks
CLUB A: Broken toe CLUB B: Ligament damage to ankle
Claim made: £17,160 Claim made: £22,000Paid: £14,400 Paid: NIL
Club A – had no documentation
Club B – was able to produce a copy of its written risk assessment and detail its maintenance programme to show the car park was regularly inspected and maintained and it detailed the repairs that were carried out when required.
Mock Trial – February 2014Croft v’s Kettle Dale Cricket Club (Edgbaston County Court)
Berryman Lace MawerNo 5 Chambers
Judge – Chris Bright QC• Injury to player not disputed• Risk assessment
– ‘was reasonable under the circumstances’Systems and proceduresDocument Management
Is your Association (and its constituents) covered for these claims?
• Injury at Barbeque• Corporate Manslaughter• Child Abuse (1 sport £870,000)• Repetitive strain injury (gradually occurring)• Disability Discrimination (membership of an NGB)• Breach of Human Rights (membership of an NGB)• Injury to a ‘volunteer’ at a National Championships• Libel and Slander (NGB Chairman to a Board member)• Contract Liability (three major clothing manufacturers)• Data Protection (inappropriate use of personal information)• Employment Practices Liability (senior member of NGB staff)
What does your insurance cover?
Public Liability • Accidental bodily injury or damage to property
Professional Indemnity • Errors and omissions in advice, failure to perform
Director’s and Officers’ • Failure to perform Executive responsibilities
Employers Liability • Injury to an employee
Cyber Liability and Data Protection
• ‘Damage’ to your data• ‘Damage’ to third party data
What does your insurance cover? cont’d
Public Liability • Limit of Indemnity• May not cover coaching risk, or abuse or high risk activity
Professional Indemnity • May cover financial loss only• Aggregate Limit of Indemnity
Directors’ and Officers’Provided for the National Body- Not extended to Regions, Counties,
ClubsEmployers Liability
Issues to look out for
Summary and Conclusions• Claims for compensation are now, sadly, integral to participation in Sport and
Recreation• A poor claims record will have a significant, adverse, effect on the overall cost of
insurance• Effective risk management is essential and it must prevail from the ‘top to the
bottom’ of the sport– Measures must make the sport safer– Procedures must be documented for future reference
• Claims are increasing in their type and complexity, so comprehensive protection for a National Governing Bodies and all its constituents is essential
• Real and tangible improvements have been made, in recent years, to make participation in sport safer. Keep up the good work, but there is still lots to be done and there will always remain a risk element!
