Up for SML Renewal? Tell your Safety Story

No matter where you are in your insurance purchasing cycle, you have been hearing about the impact that social inflation, growing numbers of sexual abuse claims, increasing settlements, and the hardening insurance market are having on your options. Insurers are tightening the limits and coverages they are willing to offer as they manage the increasing cost of risk. Praesidium’s internal analysis demonstrates that the number of payouts of $1 million or more for incidents of sexual abuse has increased by 45% since 2010, and youth-to-youth incidents are increasing in both frequency and severity year-over-year. You should expect to answer increasingly demanding questions about your organization’s consumer protection practices at your next renewal.

In our 2022 Insurance Benchmarking White Paper and related interview with a panel of insurance industry experts, we explored the state of the insurance industry and key trends to watch. 78% of the participating carriers predicted tightening underwriting requirements, and 92% expected the market to harden even further. When asked where they see the SML coverage market in the next three years, 85% projected increased premiums, 77% projected decreased limits, and 69% projected decreased coverage availability.

Now, in 2024, those predictions have materialized. Insurance providers continue to raise their expectations, holding organizations to higher standards than ever. As an organizational leader, you must ensure you can expertly articulate your organization’s commitment to abuse prevention. How confidently can you tell your safety story?

Take a moment to consider your answer to this question: “Can you tell me about your organization’s abuse prevention policies?”.

Your response might be long and detailed, but it likely started with, “Of course.”

Clearly communicated and documented policies are foundational to a robust safety culture, but effectively articulating your organization’s policies is just the first step in telling your safety story. You must also authentically demonstrate how those policies become practice – and how you hold your team accountable when practices miss the mark.

How ready are you for follow-up questions like these:

• Where in your facility are you most concerned that abuse could happen? Why?
• How do you educate your board about the critical importance of abuse prevention?
• Tell me about your most recent investment in abuse prevention.
• When did you last let someone go for violating a zero-tolerance policy?
• How does your culture of safety impact every interaction your staff and volunteers have with a consumer?

As you approach your insurance renewal, consider preparing for the conversation like you would a job interview. Be ready to answer questions with tangible examples. Anticipate questions that require you to apply your organizational policies on the spot.  This may require both research and practice! Think about the example questions listed above – what additional information do you need to be able to respond to them all confidently?

Keep in mind that abuse prevention is a shared responsibility.  Take time routinely to listen and learn so that your safety story stays accurate and authentic to what is happening across your organization, not just at your desk. For example:

• Engage your leadership team to determine how they are applying your policies on a day-to-day basis and ensure that no department or program is operating in a silo.
• Participate in incident and near-miss debriefs to identify any gaps in your policies or practices and stay updated on the resulting changes or improvements.
• Attend staff meetings to understand barriers and what strategies or resources are needed to address them.

When renewing your insurance, carriers need to know that you are committed to consumer protection. Be prepared to tell your safety story and demonstrate why insurers and consumers can continue to trust your organization.

If you are unsure where to start, would like guidance on improving your abuse prevention practices, or need support turning policies into action, Praesidium can help.

And if you are ready to take your efforts a step further, explore opportunities for Praesidium Accreditation. 71% of the carriers we surveyed stated that organizations with accreditation by an outside expert are more likely to get SML coverage, 86% stated accredited organizations are more likely to get higher limits, and 43% stated accredited organizations are more likely to get a lower premium. In addition, 100% of surveyed organizations agree that by completing the Praesidium Accreditation process, they were better able to understand gaps in their abuse prevention systems and address them. Visit our Praesidium Accreditation website to learn more.