Authors: Ian Ackerman Gail Murray
At a recent Gallagher global conference, US-based consultant Ian Ackerman and Australia's Gail Murray came together to explore key risk trends impacting the intellectual and developmental disabilities (IDD) sector in their respective countries. What emerged was a shared understanding of the pressures these mission-driven organizations face, as well as potential strategies to help them respond.
Shared risk trends in the IDD sector
Financial pressures
Providers are seeing reduced availability of coverage for high-risk areas like physical and sexual abuse, as well as lower Umbrella/Excess Liability limits. These limit reductions are especially strong on Abuse and Professional Liability lines, but because of social inflation and unfavorable tort and regulatory environments, General and Auto Liability lines aren't immune to this issue. Insurers are requiring stronger evidence of risk management practices to offer meaningful protection.
In addition, IDD organizations with large motor fleets face rising premiums due to an increase in distracted driving incidents and repair costs that negatively impacted insurer loss ratios.
Insurance challenges
There is a notable reduction in insurance coverage for physical and sexual abuse, with insurers demanding higher risk management standards where coverage is still available. Additionally, services with large motor fleets face significant premium increases due to high loss ratios and repair costs. Issues such as staff driving unfamiliar large vehicles and theft of parts add to these challenges.
Exposure to natural disasters
With more frequent and severe natural disasters, organizations are being forced to manage both physical repairs and the complex task of relocating vulnerable individuals to temporary housing — sometimes with limited notice or resources.
Risk mitigation strategies for nonprofit providers
Addressing these key issues requires a multifaceted approach that combines financial management, risk mitigation and strategic planning. Here are some potential solutions for each issue.
Navigating financial pressures
- Cost optimization: Conduct a thorough review of operational expenses to identify areas for cost savings. These areas may include renegotiating vendor contracts, implementing energy-saving initiatives and optimizing workforce management.
- Diversified funding: Explore alternative funding sources such as grants, donor partnerships and fundraising initiatives. Building relationships with local communities and stakeholders also can help secure additional support.
- Efficiency through technology: Invest in technology and process improvements to enhance service delivery efficiency. Automation and digital tools can reduce administrative burdens and improve resource allocation.
Addressing insurance market challenges
- Strengthen risk management: Implement and document policies and procedures to keep your clients and employees safe — especially those related to abuse prevention protocols. Conduct regular staff training, use insurance carrier resources to enhance loss prevention measures and complete third-party risk audits to demonstrate insurability.
- Enhance fleet management: Enforce clear driver eligibility standards that reflect legal, insurer and organizational requirements. Provide training specific to operating large passenger vans, loading/unloading individuals with disabilities and mitigating distracted driving. Telematics, GPS and dash-cam monitoring can further reduce losses, offer opportunities to reinforce training and result in a more desirable risk profile.
- Focus on insurance strategy, not just renewal: Work with a broker who specializes in the nonprofit and social services sector — one who understands the nuances of the IDD landscape and has access to specialized markets. A thoughtful marketing strategy should focus not only on this year's renewal but also consider future positioning. Has your account been to market repeatedly in the past 12-36 months? Is your broker generating genuine underwriting interest or exhausting your market options? Are you eligible for and have you investigated alternative risk transfer program structures? These questions are critical.
Building resilience against natural disasters
- Disaster preparedness: Develop and regularly update disaster preparedness plans, including evacuation procedures and emergency communication protocols. Ensure staff are trained to respond effectively to natural disasters.
- Infrastructure resilience: Invest in infrastructure improvements to enhance resilience against natural disasters. These improvements may include reinforcing buildings, installing flood defenses and securing backup power sources.
- Partnerships for relocation: Establish partnerships with local organizations and government agencies to facilitate the safe relocation of residents during emergencies, which includes identifying suitable temporary accommodations and transportation options.
Gallagher's global commitment to the IDD sector
At Gallagher, we believe that organizations serving the IDD community deserve tailored solutions and expert support. Drawing from our global reach and local knowledge, we help providers respond to risk with confidence by:
- Taking a strategic approach to growth by benchmarking against other IDD organizations
- Enhancing productivity and efficiency through new technologies and systems
- Expanding coverage to support disability employment training and workforce development
- Investing in strong risk management advice and creating underwriting opportunities that reward quality service
- Forming partnerships with both traditional carriers and alternative risk providers to address complex insurance needs and expand placement options in challenging areas
Our goal is to help IDD providers reduce their total cost of risk while supporting long-term sustainability so they can focus on what matters most: empowering individuals with disabilities to live full and meaningful lives.
