How to Become a Better Risk Management Partner to Your Clients
Posted on: December 11, 2020 by Care Providers Insurance
In this article originally published by The Rough Notes Company, Inc, our Program Director, Chris Hale, provides an overview of how insurance agents can become better risk management partners for their nonprofit clients
Any quality agent knows that proactively helping clients plan and determine risk management strategies is critical to building successful long-term relationships. This has always been true, but it is even more important now as organizations continue to navigate a global health crisis and strategize for whatever a post-pandemic world may look like.
Amid ongoing change, business continuity planning (BCP) specifically has to be part of the conversation with clients, especially as they embark on 2021 forecasting. This does not mean simply raising the topic with them. You can provide the most value by guiding clients through the BCP process, helping them create a framework to identify, prevent and recover from potential threats, and ensuring they have the proper coverage in place to minimize risks as operations continue to shift.
Business continuity vs. crisis management vs. disaster recovery
Some clients might hear the phrase “business continuity” and assume that if they have a crisis management or disaster recovery program in place, they are fully prepared. It’s a common misconception, but that is not actually the case. Start by educating your clients on the key differentiators of BCP compared to other planning practices.
Amid ongoing change, business continuity planning has to be part of the conversation with clients, especially as they embark on 2021 forecasting.
In a nutshell, BCP is a planning process that is focused on ensuring that an organization continues to function with little or no downtime should normal operations be disrupted. On the other hand, crisis management is centered around how an emergency, disaster or catastrophe is or will be handled, while disaster recovery is geared toward restoring IT infrastructure such as data and applications should a disaster occur—for example, if an organization’s data center or servers are damaged or destroyed.
On the business continuity radar
With alignment around what BCP is—and what it is not—you can start digging into the details of planning. Every organization will have unique considerations, but keep in mind that in light of the pandemic, BCP managers have started revamping plans to include variables that rarely had been previously addressed. These are some of the key implications you should make sure that your clients address:
- Mobile Property: Keeping operations running in the face of disruption often means working from wherever you can, which brings the role of mobile property—including computers, tablets, monitors and more—into focus. Business Personal Property (BPP) insurance covers this type of equipment, but coverage is typically limited when items are away from their designated office location. This means if employees are using these tools to work remotely, as many are today, there may be a break in coverage should an item be damaged, stolen or lost while off premises. As you walk your clients through their existing coverage, educate them about the different policy enhancements that offer extensions of coverage for BPP being used remotely. Given today’s fluid work environment, it is also worth exploring the benefits of converting their existing coverage to an Inland Marine floater coverage that is not bound to a specific location.
- Cyber Liability and Data Breaches: As organizations rely more heavily on online tools both externally (for example, nonprofits offering virtual counseling services or implementing online giving programs) and internally (for things like team collaboration software), their web-based risk also increases. At the same time, hackers—unfortunately, but perhaps unsurprisingly—have ramped up cyber-attacks during the pandemic. As such, cyber liability and data breach insurance is a vital part of the insurance discussion. Offer clients insight into how digital strategy, platforms, vendor contract language and other factors impact an organization’s liability and work together to minimize and manage the associated risks.
- Staffing Levels: As restrictions surrounding indoor capacity and social distancing remain in place, organizations must carefully assess how they are staffed so they can continue delivering on their mission without incurring undue risk. For example, in the nonprofit and social services sector that our team at Care Providers Insurance Services focuses on, maintaining adequate staff-to-client ratios is key to ensuring proper oversight and reducing abuse and molestation risks. This is a challenge when an organization needs to keep physical staff members to a minimum while striving to serve as many clients as it can and meet the needs of the community.
One of the greatest lessons from the past year is that the best time to understand how insurance impacts business continuity planning, and vice versa, is before a crisis, not during it. Now more than ever, organizations must think strategically about the risks to their continued operations, whether they are properly covered and, most important, if they have a trusted agent on their side to guide them through the ever-changing business landscape. Your clients deserve more than a policy—they deserve a partner in risk management.
Chris Hale is the director at Care Providers Insurance Services (CPS), a program built by NSM Insurance Group, a leading provider of specialty insurance programs. For more than 25 years, CPS has focused exclusively on partnering with independent agents to serve nonprofit and social service organizations across the United States with specialized and comprehensive insurance programs. To learn more, you can contact Chris at CMHale@nsminc.com.