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October 31, 2023

Navigating the storm: Risk management strategies for human service and non-profit organizations

Eric Beck

In the complex insurance world, human service agencies have recently sailed through turbulent waters. The insurance market for these organizations has become increasingly challenging. Claims activity for abuse cases is surging in frequency and severity. Tracking the latest statistics, emerging trends, and available risk management solutions is vital in protecting your organization and setting it up as the standard for best practices.

Rising premiums

One reality that social service agencies must confront is the soaring cost of insurance premiums for abuse-related claims. The statistics are undeniable, with premiums witnessing alarming increases of 30% or more. These staggering hikes affect an organization's financial health, leading to the adoption of proactive risk management strategies that try to lower these spiraling costs.

Abuse sub-limits in excess policies

Abuse-related claims are now sub-limited in excess policies. That means that even with substantial coverage, it may not be enough. Social service agencies need to be aware of these sub-limits and take steps to address potential coverage gaps.

Lines of business at risk

Premium increases and limited coverage may force some social service agencies to make tough decisions. One example is agencies that must withdraw from specific business lines. Foster care is one area impacted, with difficult choices emerging due to the increasing risks associated with providing such services. Examples like this underscore the need for a complete risk management audit to assess exposures and evaluate the viability of continuing certain lines of business.

The emergence of survivor statutes

One legal development for social service agencies is the implementation of survivor statutes in more states. These statutes extend the statute of limitations for abuse survivors, giving them additional time to bring claims against perpetrators and organizations that may have failed to prevent abuse. As these statutes become more prevalent, social service agencies must stay on top of state law changes and adjust their risk management strategies accordingly.

Mitigating the risks

Protecting operations and reputations during challenging moments will be essential for human service agencies. At Marsh McLennan Agency, we help you navigate trends in the insurance market with solutions and services, including:

  • Conducting a thorough risk management audit
    We help identify potential exposures and gaps in your coverage. This audit can encompass all aspects of your operations and insurance portfolio.

  • Employee and volunteer screening
    We help you develop a robust plan for screening and selecting future employees and volunteers. Our thorough background and reference checks ensure that individuals with questionable histories are not given access to vulnerable populations.

  • Crisis management and PR planning
    We help you prepare for crises by developing a crisis management and public relations plan. A well-defined strategy can help protect your organization's reputation and minimize the fallout from adverse events.

  • Ease of reporting
    We help your organization implement mechanisms that reduce barriers to reporting concerns and complaints. Support a culture of transparency and accountability where individuals feel safe coming forward with their problems.

  • Establish a risk committee and staff training
    Our specialists help create a risk committee within your organization and provide comprehensive training for your staff. Everyone must understand their role in responding to allegations of abuse. A proactive and well-informed team is your first line of defense.

Secure your future

The insurance market for social service agencies is undeniably challenging, marked by soaring premiums, sub-limits in excess policies, and the growing impact of survivor statutes. However, Marsh McLennan Agency solutions can help organizations weather the storm and emerge stronger. Read our Business Insurance Trends report to learn more about litigation and other trends impacting organizations like yours. In these turbulent times, preparation and diligence are your best allies in navigating the ever-evolving litigation environment in the insurance market for human services and non-profit organizations.

Ready to get started? Take a proactive step and embrace Marsh McLennan Agency’s solutions to help you navigate the challenging insurance market successfully. Learn more about mitigating your organization's litigation risk on our Business Insurance Trends page and contact a Marsh McLennan Agency representative today.