Risks are Dynamic

Justice Connect's Not-for-profit Law program considers that a Not-For-Profit or community organisation should (re)consider its risks:

• When it initially sets up
• When it starts offering services or products, or changes the type of services or products offered
• When it starts employing staff or using volunteers
• When it is hosting or running events
• When it starts using new premises
• When it enters into relationships with other organisations, like partnership agreements or services agreements
• When there are changes to the laws that affect the organisation
• When unexpected incidents have occurred that raise liability issues
• When the organisation's circumstances change
• At least once a year before the organisation's AGM, when the organisation should do a full audit to ensure that risks are identified and addressed, and that insurance cover is still meeting the needs of the organisation.

The Changing Landscape

Voluntary industry codes, together with prudential regulation and enforcement action, have been increasing ever since the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission).

The challenges of recent years have made large demands across all industry sectors - and with respect to insurance, they are only adding to an overall picture which is already complicated.

Insurance and Risk

All organisations need to develop some kind of risk-management strategy, which likely will include insurance as well as identified risks and practical steps to reduce them.

Often new insurance needs to be purchased or extended, and there will usually be other steps your organisation can take to alert people of risks and mitigate the likelihood of a risk eventuating. And, while insurance is an important consideration for not-for-profit groups, often it is mandatory under the terms of a lease or a funding agreement.

Common types of Insurance

• Public liability
• Asset and contents insurance
• Insurance for Directors and Officers
• Protection for volunteers
• Coverage for specific event

Meeting Insurance Obligations

Each type of insurance comes with an associated set of duties and obligations for the organisation. These will range from tracking of incidents and complaints, to the creation and maintenance of a risk profile, and the associated duties and controls that will need to be delegated and reported upon.

Ideally, there should be a single centralised solution for all the organisation’s requirements. This will help to avoid data silos and the additional complexity of managing different technologies and data formats.