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The Wrong Policy & No Policy Issues

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Operating your business without or with the wrong insurance can have the following consequences: -             

Without insurance

# You will find it hard to hire a venue
# Students will assume you are not a professional operation and not feel confident to join the school 
# As a waiver form rarely negates a compensation claim so you are more likely to be challenged in court
# An injured student can sue you for compensation and you will have to fund your own legal defence
# A successful compensation claim can greatly diminish the assets of those being sued -             

With the wrong insurance
# Is worse than no insurance because you have been paying for a product that doesn't protect you
# Generally there is a good chance a claim coming from a specific area (trip & slip), but not cover all the activities of the club (eg: sparring / participation)
# An Insurer may have the right to refuse a claim or only pay a proportion of a payout / legal costs

Examples of the wrong insurance:
# Just having public liability (PL - slip & trip) without professional indemnity (PI) The PI is where most claims arise from
# Having public liability (PL) and professional indemnity (PI) without the term ‘participation’ included for the sparring inclusion. There often grey areas in the coverage and ‘participation’ means sparring is actually covered
# Not including player accident with the (PL & PI) PL & PI is an additional cover that can be accessed without having to be sued for negligence. 
# Including property cover with a business pack when only leasing the building Some operators have paid enormous insurance premiums covering the property when it is not necessary
# Not including the correct (PL & PI) when only taking a business pack on its own By not understanding how the combined business packs work, operators can easily select the wrong product

What could happen if insurance application form is not correctly filled out?
Some minor discrepancies will be accepted and if challenged can be explained to the broker without any issues. If a person has deliberately under disclosed various items, this could have an impact on whether a claim is paid, or the amount reduced. They would be deemed underinsured.

What does Underinsured mean?
This term refers to an insured person either not being honest or not understanding the appropriate disclosure required by the Insurer when filling out an application form. Either way the insured may find a claim reduced or not covered at all. Premiums are calculated on the risk / exposure attributed to a particular business activity. If a person downgrades the true value of an item, it could be deemed underinsured or the amount paid out, reduced.

Examples of being under insured:
# Submitting the number of students in a class rather than the whole number of members / students in the club
# Submitting a lower number of students in your club than you actually have Example 1 – Club states it has 200 members when they have 400 to reduce the insurance premium. After a claim was investigated it was identified that club actually had twice the number of members insured. The Insurer may choice to reduce the claim by 50% leaving the operator to pay the balance themselves.

What can School Owners do to make sure they have the right insurance and have the appropriate qualifications / policies / procedures in place?
# Seek an insurance broker that is an expert in both insurance and martial arts
# Seek advise from credible peak industry bodies

Preventing incidents in your school is much better than defending a claim from an injured student. Injured students don’t pay fees and can have a negative impact on your club. Pre-emptive precautions are better than re-acting to an incident.

What should be in your policy / procedure manual
You should include such things as: blood spillage action, incident reporting, sexual harassment procedures, cleaning of all areas, making sure training areas are safe (no trip hazards), first aid kits are accessible, students are appropriately supervised, there are sufficient space around each person training to avoid collisions, students have regular drink breaks especially in hot weather. 

External events: Gradings, Tournaments, fight shows, demonstrations, fund raisers workshops, seminars and social functions etc, should be pre-planned with their own risk management policy.

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