Insurance Program Review: How a Leagues Club aligned cover, cost and contract risk
Key takeaways
- An insurance program that hasn’t kept pace with a changing business can cost more than it should and still leave gaps in the areas that matter now.
- A review that starts with risk over price can reduce cost without reducing protection.
- Declared values that reflect how an organisation actually operates make a program more efficient and more responsive.
- Contract obligations shape who carries risk and how insurance responds, so contracts and cover are best reviewed together.
- Reviewing cover before a major project or operational change leaves far more options open than reviewing it afterwards.
Why an insurance program needs to keep pace with the business
Insurance costs are rising, and most boards and executive teams feel it at renewal. An increase in price begs the question of whether the program behind those premiums still fits the organisation it been built to protect.
That was the position of a leading Leagues Club that came to Austcover. Its operations had evolved, it had taken on new projects, and its risk profile had changed along with them. The Club wanted confidence that its cover remained appropriate, and it wanted to address increasing insurance costs at the same time.
The two concerns are closely linked. A program that no longer reflects how a business operates can be costly in one place and thin in another, and the gaps usually only become visible when a claim is made.
Start with the risk, not the premium
Reducing premiums was part of the brief, but it was not where the review began. Working closely with the Club’s key stakeholders and specialist advisers, we looked at how the Club operates today, where it is heading, and then assessed:
- property and business interruption exposures
- liability and other organisational risks
- operational changes and future plans
- the structure of the cover, including limits and how each policy would respond
Our aim was an insurance program that accurately reflected the Club’s risk profile and provided strong protection, not simply to reduce their premiums.
A revised structure built around how the Club operates
Following a detailed review, we recommended a revised structure that:
- better aligned declared values with operational requirements
- improved the overall efficiency of the program
- maintained broad protection across the key areas of risk
- supported the Club’s strategy for the years ahead
Declared values matter because they influence both what a business pays and how a policy responds at claim time. When they reflect real operational requirements, the insurance program does its job if the time comes to make a claim.
“The savings came from ensuring their program matched the needs of the business, not from stripping back cover. ”Brian Kunde, Account Manager
Contract risk: beyond the insurance program
This review highlights the importance of understanding of contractual risk management. During the construction contract review, we worked through how the obligations written into a contract influence risk transfer, insurance outcomes and the organisation’s overall approach to managing risk.
Generally, risk is accepted in a contract first, and insurance is arranged afterwards to match it. Policies respond to defined events and conditions, and these can be narrower than the obligations a contract creates. Where the two don’t line up, part of the risk can sit with the organisation unnoticed.
A clause that looks routine at signing can decide who pays when something goes wrong. Understanding that before a contract is signed gives an organisation far more control over its position. We covered the common clauses in more detail in Contract Risk in Construction: Insurance Mistakes Hidden in Common Contract Clauses.
The outcome
Our review delivered a more sustainable and appropriately structured program, a reduction in annual insurance costs while maintaining comprehensive protection. In practice, the Club achieved:
- reduced annual insurance expenditure
- closer alignment between risk exposure and cover
- broad protection maintained across core operational risks
- a stronger approach to contractual risk management
- a program positioned for what the Club does next
If it’s been a while since you reviewed your insurance, now is the time. Let’s make sure your insurance program has grown with your business.
Review your cover before the next change, not after
New projects, changes to operations and signed contracts all alter the risk an organisation carries. If any of these have changed since your last review, it’s worth ensuring that your program still reflects them.
Austcover can help assess your current insurance arrangements, review how your contracts and cover line up, and identify where the program could work harder for your organisation.
