Voluntary groups hit with ever increasing insurance rates.
Liability Insurance and the Voluntary Sector--Framing the issues, which resulted from seven regional sessions conducted across the country over an eighteen month period ending in June 2004 and from an on-line survey, found that 87 per cent of online respondents reported increases in insurance costs while 96 per cent reported no increase in their insurance claims. About 24 per cent had increases that were more than double that of previous years.
Non-profit groups must now buy extra insurance coverage for each event they produce and often several types of insurance are required for one event where once it was covered by their general insurance policy.
The most common reason from insurers given to volunteer groups and non-profit organizations for these increases is that premium hikes are the result of September 11, 2001, whereby insurance companies made large payouts. This, the insurance industry says, also resulted in a heightened sense of risk, particularly terrorist activity.
The fallout from increased insurance premiums is not just a greater amount taken from the sector's coffers, but that their activities, which are directly related to their core mandates, are increasingly questioned and restricted by the insurers, even though nothing has changed in their program delivery. As well, their ability to raise money is further altered because funders do not take insurance hikes into account when providing funding, but at the same time, require the sector to have insurance in order to receive funding.
Respondents also noted that there are currently only about six carriers in the country willing to provide insurance to the sector, giving little room for more competitive premiums. To make matters worse, insurers generally tend to lump vastly different organizations together in the same risk categories, such as putting an organization that builds and maintains hiking trails in the same risk category as heli-skiing or bungee jumping.
Among its recommendations to improve the insurance situation, the Voluntary Forum will develop a strategy and policies to deal with insurance issues directly with the industry and with governments, develop a national virtual voluntary sector insurance network and increase awareness among policy makers and the insurance industry about the impact rising premiums has on non-profit organizations to meet their mandates and provide services to Canadians.
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|Date:||Oct 25, 2004|
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