Presentation - County Squash and Racketball Associations

Finance & Governance Forum Understanding and Managing Risk 24 April 2014 Richard Doubleday Managing Director, Sport and Recreation Perkins Slade Ltd

Sport specific Risk Management and Legal Liability •

Review of claims – what happens when a risk goes wrong?

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Consequences – From an insurers’ perspective

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Practical Risk Management examples – British Gymnastics – Lawn Tennis Association

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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

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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

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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

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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 Information Year

Net Premium £

Claims Paid £

No

Claims o/s

No

2009/10

105,000

2010/11

58,000

3

-

-

58,000

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 Strategy What would be the premium for 2014/15? – Previous 5 year claims ratio (2004-2009) 61% – 2013/14 - 6 months only

Total Paid/ Reserved £

Underwriting Strategy •

Not including large loss 4 years @ £315,000 1 year @ (6 months x £71,000) 5 year average

= = =

£315,000 £142,000 £ 91,400

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Add claims inflation @ 10% Add large loss provision £1m over 50 years Sub Total

= = =

£ 9,140 £ 20,000 £120,540

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Add insurers administrative costs @ 19% 2014/15 net premium

= =

£ 22,902 £143,442

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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

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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

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Accredited Training Programme – Evidence of competance

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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)

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Based on the HSE Model

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Creates a practical Risk Assessment

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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 Claims Club members who tripped over pot holes in their clubs’ car parks CLUB A: Broken toe Claim made: Paid:

CLUB B: Ligament damage to ankle £17,160 £14,400

Claim made: Paid:

£22,000 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 2014 Croft v’s Kettle Dale Cricket Club (Edgbaston County Court) Berryman Lace Mawer No 5 Chambers Judge – Chris Bright QC • •

Injury to player not disputed Risk assessment – ‘was reasonable under the circumstances’ Systems and procedures Document 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)

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Employment Practices Liability (senior member of NGB staff)

What does your insurance cover? Public Liability

• Accidental bodily injury or damage to property

Professional Indemnity

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Errors and omissions in advice, failure to perform

Director’s and Officers’

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Failure to perform Executive responsibilities

Employers Liability

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Injury to an employee

Cyber Liability and Data Protection

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‘Damage’ to your data ‘Damage’ to third party data

What does your insurance cover? cont’d Issues to look out for 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’ Employers Liability

Provided for the National Body - Not extended to Regions, Counties, Clubs

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

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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!