Insurance can often get a bad rap. It may seem like insurance is an unnecessary cost that rolls around each year with little value if you haven’t made any claims. So why is insurance so business critical?
When you take out an insurance policy, you are essentially buying a promise that, if something awful happens to your club or organisation, you will be able to recover, rebuild and continue to operate. You are transferring risk away from your club/organisation and onto the insurer. In this way, insurance is actually an asset to any entity, and one where you see the huge benefit of it when something bad has happened. You are protecting your club’s assets and providing a safety net to ensure the future financial viability of the club in the event that an unforeseen accident or injury occurs, including where the club is negligent. Insurance can provide financial protection when you are hit with medical expenses, damages and/or legal bills that could place your organisation in financial difficulty.
Let’s discuss one of the mistakes club sports can make – not having appropriate insurance in place.
It is often a common attitude that clubs or organisations that haven’t experienced a serious player or member injury or a lawsuit, and are safety conscious don’t need insurance. This can be a very risky and short-sighted approach. Injuries and accidents in sports clubs are very common-place, and if you haven’t yet had to deal with an accident that has resulted in a big medical bill, you no doubt will at some stage given the chances.
Some clubs believe they are protected by a requirement for players and guardians to sign waiver / release forms. A well written waiver form can attempt to help a club minimise liability but waivers are increasingly being disputed and interrogated by the courts – they are not foolproof. Also, legal defence costs can easily run into the tens of thousands, if not hundreds of thousands, of dollars. A comprehensive insurance policy can financially protect you against these types of costs.
Believing that because you are a small organisation and therefore don’t need comprehensive cover or insurance cover at all, is very risky. In fact, it’s the opposite. If something goes wrong, the ‘bigger’ organisations may be able to take the hit and survive whilst the ‘little guys’ could be bankrupted (and in certain circumstances, directors of clubs could be held personally responsible). Insurance ensures that smaller operators such as local sports clubs are supported in this way as there are strength in numbers.
In this day and age, it’s both prudent practice and good governance to make sure that you have appropriate and adequate insurance in place!
Disclaimer: General advice and information only
Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any information on this website you should assess or seek appropriate financial advice on whether it is appropriate for your needs, financial situation and insurance objectives.