1. 24 April 2014 Richard Doubleday Managing Director, Sport and Recreation Perkins Slade Ltd Finance & Governance Forum Understanding and Managing Risk

2. Sport specific Risk Management and Legal Liability Review of claims – what happens when a risk goes wrong? Consequences – From an insurers’ perspective Practical Risk Management examples – British Gymnastics – Lawn Tennis Association Protecting your sport – Liability insurances

3. Review of sports related claims There are representatives from approximately 30 National Governing Bodies here today. Of these, at least: – Two have had one or more claim(s) for damages, settled in excess of £5m – Two more have claims, currently reserved at more than £1m – Two more have claims, currently reserved at more than £250,000 Just because your sport is ‘low risk’, please do not think you are safe from a potential “catastrophic” loss: – In 2013, £5m damages was paid to an individual, as a consequence of an injury arising at a barbeque!

4. Review of sports related claims cont’d On behalf of a number of National Governing Bodies, Perkins Slade has recently settled or is handling claims in relation to: – Corporate Manslaughter – Child Abuse (1 sport £870,000) – Repetitive strain injury (gradually occurring) – Disability Discrimination (membership of an NGB) – Breach of Human Rights (membership of an NGB) – Injury to a ‘volunteer’ at a National Championships – Libel and Slander (NGB Chairman to a Board member) – Contract Liability (three major clothing manufacturers) – Data Protection (inappropriate use of personal information) – Employment Practices Liability (senior member of NGB staff) – AND THAT IS JUST THE TIP OF THE ICEBERG!

5. Review of sports related claims cont’d At any one period of time, the Perkins Slade Claims Team is handling: – More than 5,000 incident notifications – More than 1,500 ‘live’ claims We know two things for certain: – Every so often, there will be a catastrophic loss – We have absolutely no idea, where it will come from WHAT EFFECT WOULD AN ADVERSE CLAIMS EXPERIENCE HAVE ON YOUR SPORT?

6. Underwater Tiddlywinks Association Renewal – October 2014 – 40,000 members (premium £2.50 per person) – Been with the same insurer since 2005 – 3 year Long Term Agreement coming to an end – Large loss in 2011/12 (£955,000) – Significant increase in claims notifications in 2012/13 and 2013/14 (part year) – Sport is generally considered to be well run, well regulated, well controlled – Did not perform well in the 2012 Olympic Games and participation figures have not hit targets. Exchequer funding reduced by £100,000 per annum – Has significant financial challenges!

7. Underwriting Information YearNet Premium £ Claims Paid £ NoClaims o/s NoTotal Paid/ Reserved £ 2009/10105,00058,0003-- 2010/11105,00068,0007-- 2011/12100,000985,000*357,00051,042,000 2012/13100,00022,000280,00011102,000 2013/14100,00026,000245,000571,000 Total510,0001,159,00017182,000211,341,000 *Includes one large loss at £955,000 Underwriting Strategy What would be the premium for 2014/15? – Previous 5 year claims ratio (2004-2009) 61% – 2013/14 - 6 months only

8. Underwriting Strategy Not including large loss 4 years @ £315,000 =£315,000 1 year @ (6 months x £71,000)=£142,000 5 year average=£ 91,400 Add claims inflation @ 10%=£ 9,140 Add large loss provision £1m over 50 years=£ 20,000 Sub Total=£120,540 Add insurers administrative costs @ 19%=£ 22,902 2014/15 net premium=£143,442 October 2014 premium per member £3.57

9. Question What can be done to improve the risk ? (Ideally, what could have been done by the Underwater Tiddlywinks Association prior to 2011/12) – Proactive measures to minimise the risk of injury – Robust procedures to defend Civil Court actions

10. Case Study 1 British Gymnastics – Challenges Large losses High volume attritional losses Claims against coaches Solutions – Fewer ‘recognised’ environments – Fewer ‘recognised’ activities – Managing The Risks of Coaching

11. British Gymnastics – Managing the Risks of Coaching Online resource – Health, Safety and Welfare Manual Accredited Training Programme – Evidence of competance Records maintained by British Gymnastics – Used by 25% of coaches

16. Case Study 2 Lawn Tennis Association Challenge – High volume attritional losses – Claims against clubs (volunteers) Solution – Online Risk Assessment Tool

17. LTA Risk Assessment Tool Compulsory for all clubs since October 2013 (unless they self declare) Based on the HSE Model Creates a practical Risk Assessment Record maintained by the LTA – No risk assessment – no insurance!

18. LTA ONLINE RISKS ASSESSMENT TOOL

25. Defence of Claims Club members who tripped over pot holes in their clubs’ car parks CLUB A: Broken toeCLUB B: Ligament damage to ankle Claim made:£17,160Claim made:£22,000 Paid:£14,400Paid:NIL Club A – had no documentation Club B – was able to produce a copy of its written risk assessment and detail its maintenance programme to show the car park was regularly inspected and maintained and it detailed the repairs that were carried out when required.

26. Mock Trial – February 2014 Croft v’s Kettle Dale Cricket Club (Edgbaston County Court) Berryman Lace Mawer No 5 Chambers Judge – Chris Bright QC Injury to player not disputed Risk assessment – ‘was reasonable under the circumstances’ Systems and procedures Document Management

29. Is your Association (and its constituents) covered for these claims? Injury at Barbeque Corporate Manslaughter Child Abuse (1 sport £870,000) Repetitive strain injury (gradually occurring) Disability Discrimination (membership of an NGB) Breach of Human Rights (membership of an NGB) Injury to a ‘volunteer’ at a National Championships Libel and Slander (NGB Chairman to a Board member) Contract Liability (three major clothing manufacturers) Data Protection (inappropriate use of personal information) Employment Practices Liability (senior member of NGB staff )

30. What does your insurance cover? Public LiabilityAccidental bodily injury or damage to property Professional IndemnityErrors and omissions in advice, failure to perform Director’s and Officers’Failure to perform Executive responsibilities Employers LiabilityInjury to an employee Cyber Liability and Data Protection ‘Damage’ to your data ‘Damage’ to third party data

31. What does your insurance cover? cont’d Public LiabilityLimit of Indemnity May not cover coaching risk, or abuse or high risk activity Professional IndemnityMay cover financial loss only Aggregate Limit of Indemnity Directors’ and Officers’ Provided for the National Body - Not extended to Regions, Counties, Clubs Employers Liability Issues to look out for

32. Summary and Conclusions Claims for compensation are now, sadly, integral to participation in Sport and Recreation A poor claims record will have a significant, adverse, effect on the overall cost of insurance Effective risk management is essential and it must prevail from the ‘top to the bottom’ of the sport – Measures must make the sport safer – Procedures must be documented for future reference Claims are increasing in their type and complexity, so comprehensive protection for a National Governing Bodies and all its constituents is essential Real and tangible improvements have been made, in recent years, to make participation in sport safer. Keep up the good work, but there is still lots to be done and there will always remain a risk element!