Club Insurance

Insurance cover is a necessary expenditure for clubs, as with all other businesses and organisations. But the sector has some unique aspects that need to be understood by insurers, to make certain that the protection provided is appropriate yet affordable.

As a starting point, the insurance industry needs to recognise that the clubs sector is very wide and varied, ranging from community clubs to country clubs, fitness clubs to working men’s clubs. Insurers need to understand the differences between these in respect of their insurance needs and offer premiums and cover accordingly.

My own experience of this sector goes back over 30 years and during that time I have seen clubs face some big changes and new issues. For example:

• Traditional working men’s clubs have struggled to keep pace with the changes in leisure habits. There has been an increase in ‘drinking at home’, coupled with more leisure opportunities such as internet, DVDs, satellite TV etc.
• Incomes from gaming machines are reducing for many clubs.
• Many club members want more from their club, whatever its makeup
• Drink / driving penalties and healthier lifestyles are perhaps reducing members’ desire to drink in clubs.
• Clubs used to have good price differentials compared to pubs and restaurants, but this has reduced.
• There are tougher legislative issues for clubs to deal with.

And the change is continuing. The current risk and insurance related topics that dominate the club insurance industry today seem to be:

• The smoking ban.
• Employment claims... unfair dismissal, employee rights, harassment... all cost money to defend.
• Some clubs paying less attention to maintenance and safety.

The club insurance industry has tried to keep pace with these and other changes. Specialist insurance brokers can help insurers to understand these changes and negotiate cover improvements. For example, policy covers have increased to cope with new areas of legislation and regulation.

Insurers are having to meet claims arising from issues such as the ‘no win, no fee’ culture, the slip / trip awards, the worst floods on record in the UK, riot damage, legal expenses claims and the concept of the club officials being held personally responsible for the club activities.

At the same time, they are dealing with the challenges and costs of regulation and transparency issues. Due to competition in the marketplace, premiums are at similar levels to 30 years ago.

So – similar premiums to 30 years ago but greater insurance risk exposure and costs – not a great mix for insurers and there are always fears that premiums might increase.

With clubs struggling to increase their turnover and revenue, many are looking at the other side of the balance sheet and trying to achieve sensible economies in expenditure. However, that has to happen in a planned way... not just cutting the staffing, stopping the milk or getting a cheap insurance quote that may not give the protection required! If an incident is not insured the repercussions on a club’s finances could be severe.

The club insurance industry though has to play its part and be consistent in its messages. They need to look at ways of cutting out costs, to make the product affordable and accessible. They also need to support initiatives that can help clubs to reduce their levels of risk.