Charity Insurance: Crafting Complete Risk Management Strategies
Insurance is a crucial part of any charity’s risk management plan, but too often non-profit entities attain the right insurance coverage but neglect the rest of the risk management process. While adequate insurance coverage is necessary to protect any operation from facing the financial repercussions of unforeseen circumstances, there are many other ways to help mitigate a charity’s risk exposures and prevent mishaps before they ever occur.
Establishing a holistic risk management strategy takes diligence and dedication, but the benefits can improve can help your clients thoroughly prepare for and endure through the unexpected. There are a few key steps to the traditional risk management process:
The first step in crafting a risk management strategy is, actually understanding what risks a charity may encounter. Identify and assess any hazards and operational, financial and strategic threats which confront an organization. It is important to take into account prevalence, pervasiveness, frequency and severity of these threats to form a hierarchical rank of all an organization’s risk exposures. It is also important to account for compounding or multi-risk events where more than one hazard befalls an operation at a given time. Experts recommend brain storming worst case scenarios during this process to prepare any operation for the “what ifs” which could greatly impact their performance.
The second stage of the risk management process is addressing these risk exposures through proper mitigation tactics that will reduce a charity’s exposure and help avoid any negative repercussions. Reducing these exposures can be accomplished in a myriad of ways, but most commonly by adjusting business practices and procedures that can lead to complications.
Risk transferring is another strategy to mitigate the hazards and pitfalls a charity may encounter. If an organization routinely utilizes contracts of purchases goods or services from others there are often ways to minimize the amount of liability which falls to the organization and to redistribute that liability to other parties and business partners. Attaining the insurance is one of the most prevalent methods of transferring risk away from any given operation.
Not all risks necessarily need to be transferred. It is important to identify which risks a charity can safely retain on its own. For some risk exposures a charity might choose to absorb that risk through its own financial infrastructure. This can be a good way to help an operation mitigate some of their smaller risk exposures while maintaining their bottom line.
When it comes time to seek out insurance coverage for a charity, non-profit or community organization there is no better provider than Charity First. For nearly thirty years we have been committed to helping agents and brokers access comprehensive charity insurance solutions for their clients. Our mission is to provide coverage tailored to meet the unique needs of this niche market segment. We invite you to contact us today at (800) 352-2761 for more information.