Businesses of all sizes across the country have been impacted by COVID-19 in some way or another. As we begin to phase back into the “new normal,” the insurance industry is seeing several changes within the non-profit sector that will significantly impact pricing and coverage, moving forward.
Rate Increases
With many businesses completely shut down and sales way off projections, insurance companies are experiencing lower annual premiums while still needing to pay out for claims. Certain lines of coverage, in particular Employment Practices Liability and Workers’ Compensation are starting to see a significant uptick in claim frequency, which will likely cause rate increases to manage these unexpected costs.
Carriers not writing any new business
Some carriers have placed a moratorium on quoting any new accounts until they can fully assess the damage on longer term exposure of COVID-19. This translates to less options for non-profit risks at renewal.
Carriers Limiting or Excluding Coverage
Many carriers are starting to increase deductible levels, lower available Umbrella limits, and eliminate certain coverage territories for certain property as a way to limit their exposure to claims. Working closely with your broker to plan for these potential gaps at your pre-renewal meeting is critical for you and your management team.
Audited Policies
In many industries, General Liability policies are audited, annually. In the non-profit space, final audits are rarely performed. In order to better account for the loss of revenues due to the shelter-in-place restrictions, many carriers will be conducting end of year audits. This could severely impact those organizations that have not been properly accounting for their exposure, as they will most likely have their revenues, employee counts, and client counts verified at the end of the policy term. Again, developing a plan now with your broker is an important part of your renewal cycle and can help maximize what potentially could be return premiums at final audit.
Looking ahead, non-profits will need to make sure they are partnered with a broker who is proactive and knowledgeable about the marketplace, so that they can stay ahead of these changes and avoid financial hardship as much as possible.
Rancho Mesa offers tools like the Risk Management Center, RM365 HRAdvantage™ portal, RM365 Advantage Safety Star Program™, weekly newsletters and Safety & Risk Management Podcast to assist our clients with successfully managing their risk and improving their marketability to carriers.
Contact Rancho Mesa Insurance Services at (619) 937-0164. to discuss your non-profit’s insurance needs.