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Cricket Club Insurance – Under-Insurance is a real cause for concern for all Cricket Clubs

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How would your club fare in this scenario?

You have insured your property for the last five years with the same Insurer, and have not reviewed your sums insured, even when prompted.

Your pavilion is insured for £ 500,000, which the Committee agree is adequate even when insurers are suggesting index linking, and another broker has suggested that it would be prudent to get a valuation survey.

Unfortunately, there is an electrical fault at the pavilion, and a major fire ensues. The Fire Brigade put out the fire, but the damage to the pavilion is so great, it will need to be demolished, and rebuilt.

The Loss Adjuster from the insurance company attends promptly, but advises that the current rebuilding cost is likely to be £ 1,250,000.

He then asks if the committee had considered a review of the sums insured, or had received any advice on the subject.

The conversation with the broker is recalled and his suggestion to undertake a valuation survey.

Insurers report back that the maximum loss payable would be £ 500,000, but they are concerned that the Committee were informed that they were under-insured but chose to renew their insurance policy without revising the sums insured.

Insurers argue that this falls short of the Insurance Act 2015 requirement that the club make a Fair Presentation of the risk, and state that gives them the right to void the policy from inception.

The club start getting quotes for demolition and removal of the debris, and find that this along with the cost of an architect plus planning permission, is likely to cost them over £ 200,000. Contractors’ quotes to rebuild are over £ 1,000,000.

The Club cannot afford to rebuild and face an extended period operating out of temporary buildings.

Members are very unhappy and decide to take legal action against the committee members. The Club has not purchased Directors & Officers liability insurance, and so the committee members blamed for the debacle have to pay their own legal fees. One even has to sell his house.

How close is your club to being the one in this scenario? 

Having recently caught up with Cricket Club Insurance expert, Colin Mico, from Insurance Broker Aston Lark, it was obvious that there is a clear and present concern with a great many cricket clubs potentially in an under-insurance position.

Aston Lark recently undertook a survey of commercial clients and the data returned prompted an immediate reaction.

Colin Mico commented: “One of the things we are seeing is just how much clubs need to increase their building sums insured as a result of the huge increase in building costs over the last 18 – 24 months.

If you combine the increases in labour and materials, there has been nearly 40% increase since 2020.

Our Commercial team have been running an under-insurance campaign with their commercial clients, and have found that

•            Over 80% of them are under-insured, and

•            By a factor of over 50%

“Under-insurance is endemic in Volunteer run Sports Clubs, and clubs are receiving very little guidance from those who are handling their insurances”, he continued, “The Insurance Act 2015 puts the onus on the clubs to make a Fair Presentation of their risk including rebuilding costs, so if they under-insure then it is effectively their fault.

If their insurance intermediaries or insurers are not helping them arrive at the right sums insured, how are clubs ever going to know?”

Aston Lark offer a benchmark figure when reviewing a club’s exposures so that they can see how under-insured they may be, and also a desktop valuation via BCH for £99 plus VAT to give clubs the choice of an independent view (which is likely to be higher than the benchmark)

“Virtually every new case we look at is considerably under-insured, and even some of our existing clients who have diligently increased their sums insured by the rate of inflation every year, are looking at a 20 – 25% increase this year”, states Colin Mico

“Imagine what we see when clubs have not revised their sums insured for the last three years?” 

It is a potentially serious situation – mismanagement resulting in personal financial loss for people running clubs, not to mention the effect that a large financial loss could have on the club’s sustainability.”

Could this be your club?

Watch further information on underinsurance in their 3-minute video below.  You can also find out more about Aston Larks Cricket Club insurance by visiting their website here.  Alternatively, call their expert team on 0330 008 5665


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