If nothing else, the controversy surrounding public liability insurance over the past few years has at least served to educate the public about an issue of major concern for community groups across the country - risk and the need to manage it.
One of the reasons that the cost of public liability insurance has increased for community groups is due to the perception - rightly or wrongly - that community groups of all types are "high risk". This is despite the fact that most have never had a claim against them.
Even so, it is important that groups identify and deal with the risks that they do face - and all community groups are exposed to a number of risks simply by virtue of the nature of the activities that they undertake. It is also important that groups do everything in their power to ensure that people and property closely related to our group are properly protected. The fact that many of the people we are talking about are volunteers who give freely of their time makes this even more of a priority.
Many organisations have ways in which they currently manage risk: a sign warning people to watch the step, a requirement that there always at least two signatories to a cheque, inspecting an oval before competition to ensure it is free of hazards, or backing up the computers once a week to protect records. All are examples of risk management.
Standards Australia describes risk management as actions that prevent "the chance of something happening that will have an impact on our objectives". So the sign draws people's attention to possible danger, two signatories on a cheques guards against one person using funds without authority, the inspection ensures hazards that could injure are removed and the computer back-up protects your records should a virus or surge strike.
Risk management is the process of thinking systematically about all the possible risks, problems or disasters before they happen and setting up procedures that will avoid the risk, or minimise its impact, or cope with its impact. It is also about making a realistic evaluation of the true level of risk. The chance of a tidal wave taking out your annual beach picnic is fairly slim. The chance of your group's bus being involved in a road accident or a volunteer hitting an electrical cable whilst digging during a working bee is a bit more pressing.
Risk management begins with three basic questions:
Not every risk can be prevented. Football clubs, no matter how good their medical and support team, can not stop all injuries. Organisations can not always predict how people will react and in some cases the very activity the community organisation was set up to do is risky.
Apart from the obvious answer of wanting to protect your own members, friends, family or competitors/clients from injury or death there are quite valid reasons why we should all look at developing a risk management process.
Some community groups believe that by incorporating they can no longer be sued. This is not the case. The effect of incorporation is to limit liability. However, directors and employees of corporations and members and officers of incorporated associations do have a risk of incurring liability if a personal breach of duty by them causes personal injury or damage to property. They can be liable if they directly caused the loss or damage or if they authorised and directed the actions which caused the event giving rise to liability.
Small organisations which take the form of a partnership are more directly exposed to potential liability. Each partner has unlimited liability in respect of any liabilities incurred by the partnership. There is a similar risk for members and officers of unincorporated community groups.
Insurers are increasingly focusing on providing cover to organisations that can prove that they do not present a "high risk". If you can provide evidence that you are effectively implementing safe practices and have moved to deal with major risks, insurers will be more likely to provide cover and to do so at a more reasonable cost.
By implementing risk management principles you are showing your members and the wider community that you place value on everyone's participation and involvement. This enhances your organisation's capacity to present a professional image, it enables you to promote and market yourself as an organisation that has strong standards of behaviour, reassures parents or carers that their charges are cared for in a professional manner and assists your organisation to structure itself to run effectively and efficiently. You can use the implementation of your risk management process to market these benefits to potential members and volunteers alike.
The process that is undertaken for identifying, assessing and evaluating risks will highlight requirements that your organisation should review and prioritise. By stepping through the process and continually reviewing these decisions over time you will enhance the capacity for boards and committees of management to make decisions based on facts rather then speculation.
Setting up a risk management register will help you list all the physical assets owned by your organisation. It also encourages staff to report it when the asset first poses a danger.
Don't scare people off by using elaborate models and charts - simply explain why you need to begin to look at the process. Get the support of your board or committee.
A risk register lists potential hazards that have identified, how serious the problem is, how it can be fixed, who is responsible for fixing it and by when. It should also be used for recording when and who has fixed the problem. (An example of a risk register is provided here.)
The aim of the register is to proactively but without a major imposition on time and effort begin to raise the profile of what risks exist within your group. Members, staff and volunteers are requested to add items that they feel could be a problem (e.g. the fraying electrical cord to the jug or urn, the slippery tiles at the entrance, the jagged wire on the fence etc). This is the first step along a detailed process.
Let everyone know that you are taking this step to better ensure everyone's safety and you need their help in adding items to the register. Let your organisation know that the topic is important and a process is being developed to better manage risk. Be prepared for the knockers. They may well be the same ones who complain once you get a claim that you didn't act quickly enough. Everyone has to start somewhere.
A more comprehensive account of the risk management process, including dozens more free help sheets, is posted online at www.ourcommunity.com.au/insurance.
You can also view our Risk Management: 10 steps to a safer organisation help sheet here.
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