Insuring the future of the Sector: The Impact of Changes in Insurance on the Voluntary and Community Sector

NICVA members and other organisations within the voluntary and community sector have voiced their concerns about substantial increases in the cost of insurance and the difficulties they are experiencing in renewing their current insurance, getting full or adequate cover and in some cases obtaining insurance at all.

As the information had been largely anecdotal, NICVA decided to undertake a research project and an associated seminar to quantify how widespread this problem is.

A total of 220 organisations responded to the survey (55% response rate).

Key findings include:

• 75% of the organisations surveyed for this research had experienced substantial increases in their insurance premiums
• The mean cost of insurance premiums twelve months ago was £8,400 for voluntary and community organisations. This has risen to a mean cost of £13,435. Overall, this represents a total increase, over a 12 month period, of 60% organisations which deal directly with children or young people are the most affected in terms of insurance increases (66% stated they have experienced substantial increases in insurances premiums over the last 12 months)
• 31% of organisations which have experienced increases in their insurance premiums believe that it is attributable to the ‘situation in the world financial markets’
• approximately one in ten organisations experienced an increase in insurance costs because of an expansion or growth in their operations (11%)
• the majority of organisations will have to find additional funding from sources intended for other purposes (49%) to cover the increased insurance costs
• 23% of organisations feel they will have to rationalise some of the services they provide and in 2% of cases the respondents believe the organisation will be faced with closure

Based on the findings of this research and the outcomes of the seminar, a number of recommendations are suggested that may alleviate some of the negative and costly experiences articulated by organisations during this project.