For producers, opportunity is everywhere in the social services and child care market. From the local Boys & Girls Club to the food bank to the Jewish Community Center or the YMCA down the street, social service and child care facilities are around every corner.
We've seen agents start with a single account and grow to a recognized leader in their markets. And non-profits provide a great network for producers to develop relationships and additional business with board members who are business owners and leaders in their community.
But generating revenue is only part of the reward for writing social service and child care center risks. Ensuring that the organizations dedicated to bettering your community can continue to offer the services that so many people need is the even bigger payoff. When the companies that support social service and child care organizations thrive, it creates a ripple effect in your community to the benefit of everyone.
After-school programs offer a safe environment for children and keep them off the streets. Youth programs provide foster care, treatment and educational services for abused children. Counseling and job centers coach disadvantaged clients and at-risk youth. Many of these non-profits are faced with a higher public demand for services they provide, but with less funding due to state and federal cutbacks
As an insurance professional, you're in a unique position to have a positive impact on these organizations–and your community–when you provide optimum coverage to protect against the unique risks they face.
Market stability during tough times
This market offers a higher level of stability than many others, even in the midst of economic volatility. There always will be a need for taking care of children. Community service organizations, child welfare agencies, child care centers and private schools exist to meet some of these needs. When times get tough and a parent has to make a financial choice between child care and other discretionary activities, the extracurricular expenditures will be the first to go.
That's not to say that these organizations haven't felt the effects of the economic downturn. Staffing, property maintenance and safety expenditures may have taken a hit at some organizations. However, these classes are comprised of well-managed, responsible organizations that are well underwritten and profitable business for agents and carriers.
Standing out from the pack
With competition increasing, how does a producer stand out from the pack? Clients in this niche look for agencies and carriers that understand their business and provide time-tested coverages to protect against their unique risks. They need someone who can evaluate their operations and recommend the right coverage.
These organizations also need a strong risk management program with services and tools to mitigate risks associated with property, auto, slip/trip/ fall hazards, employment practices, abuse and molestation and management liability. As an agent, you add significant value by advising policyholders on how to prevent incidents that trigger claims. In essence, fill a role similar to that of a staff risk manager found in large organizations.
Even with solid risk management procedures in place, the unfortunate can happen. That's when insureds find out how good their carrier's claims-handling services are. Most clients do not think about the need for experienced claims personnel–until they have a claim. Then it makes all the difference in the world. For organizations that work with children, agents should find and recommend an insurer with a rock-solid record for handling emotionally charged, youth-related claims.
Although no claims are "typical," the most frequent types of claims we see are trips and falls during playground activities or around playground equipment. These claims make up nearly 18 percent of child care claims and nearly 8 percent of social service claims. Although they do not occur with the most frequency, sexual abuse claims do garner a lot of media attention due to their severity.
In addition to Markel, some of the top players in the child care and non-profit social service market are Philadelphia Insurance Co., Stonington Insurance Co. and Travelers Insurance Co.
Policyholders also need to be assured that a carrier will remain committed to this market and will have the ability to pay covered claims for the long term. If you file a claim on behalf of a client and the carrier no longer writes the coverage, you may not receive responsive service.
Non-profit and youth-related organizations face risks similar to any business, but they also have unique exposures related to their specific operations. In addition to property, general liability and management liability coverage, they should consider cyber liability, abuse and molestation, child abduction, providers/teachers professional and accident and
health coverage.
D&O insurance is essential for non-profits to attract people to serve on their board. Anyone who serves will expect protection against claims related to the performance of their duties while acting as a director or officer for the organization. D&O also protects the organization against damages and defense costs.
EPLI is a must-have to protect against discrimination suits. No matter how carefully an organization handles downsizing, it opens the door for wrongful termination and discrimination lawsuits. According to the U.S. Equal Employment Opportunity Commission (EEOC), workplace discrimination charges were at an all-time high in 2009, reaching the second-highest level ever recorded. Increased awareness of employees' rights, greater accessibility to the EEOC, a difficult economy and poor job prospects are causing this near-historic number of filings.
Another reason to protect against potential discrimination charges is that the law changed in how it defines the term "disability." Effective January 2009, the Americans with Disabilities Act Amendment Act redefined disability to include less severe impairments than under the old law. These changes significantly broadened the act, as well as employers' exposure to claims and lawsuits.
The frequency and severity of EPLI claims are tied directly to unemployment rates. With heightened exposure for employers and discrimination cases won by employees 61 percent of the time according to Jury Verdict Research, proper coverage is critical. It is recommended that you always offer to quote EPLI to fill this coverage gap for your clients.
There are alternative coverage offerings that you do not want to overlook. Producers can round out their accounts and differentiate themselves from the competition with coverages such as employer stop loss for companies that self-fund their health benefits, limited benefit health plans for small employers and programs designed specifically for youth sports such as Little League and soccer clubs.
It's also smart business to diversify between for-profit and non-profit accounts, spread risks across property-casualty and accident and health lines, and branch out to a variety of social service and youth-related classes.
Classes for social services and child care evolve continually as the needs change. Tutoring services are rapidly expanding, some community colleges now offer day care, and you can find schools that provide after-school care. Community services touch all generations and social classes, including senior centers, Boy and Girl Scout Councils, museums, grantmaking foundations and others.
Social service and child care clients offer a multitude of opportunity for you to grow revenues, balance your book of business, and round out your accounts–in addition to the personal satisfaction gained from knowing that you're helping others right in your neighborhood. Make a ripple today–and do something good for you, your agency, and your community by supporting the organizations that build vitality in our communities and help America's children thrive.
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