Hampshire Scouting

Looking at Risk and Insurance

Risk is present in all activities. If the charity’s trustees are to achieve their purpose and safeguard the charity’s funds and assets, they have to consider the risks that might undermine their plans and efforts.

The Charity Commission requires that all Trustee boards consider the broader risks as well as the activity risks. The larger the charity the more detailed the risk management process has to be.

This is a different approach to the Activity Risk Assessments that are routine in all Scout activities; these are undertaken by the leaders and approved at the appropriate level for the activity. The Committee will want assurance that the activity risks are being competently managed.

The categories of risk are given by the Charity Commission as below.

Risk category / Examples
Governance risks / • inappropriate organisational structure
• trustee body lacks relevant skills or commitment
• conflicts of interest
Operational risks / • lack of beneficiary welfare or safety
• poor contract pricing
• poor staff recruitment and training
• doubt about security of assets
Financial risks / • inaccurate and/or insufficient financial information
• inadequate reserves and cash flow
• dependency on limited income sources
• inadequate investment management policies
• insufficient insurance cover
External risks / • poor public perception and reputation
• demographic changes such as an increase in the size of beneficiary group
• turbulent economic or political environment
• changing government policy
Compliance with law and regulation / • acting in breach of trust
• poor knowledge of the legal responsibilities of an employer
• poor knowledge of regulatory requirements of particular activities (eg fund-raising, running of care facilities, operating vehicles)

The Charity Commission identifies strategies for dealing with risk; these are:

  1. Transferring financial consequences, usually through outsourcing
  2. Being risk averse and not undertaking a service etc
  3. Mitigation of the risk
  4. Identifying the risk as linked to purpose and insuring as far as possible

Steps in Risk Management

  1. Understanding risk and establishing a policy
  2. Investigate and identify risks
  3. Assess likelihood and potential severity
  4. Evaluating what action is needed to mitigate
  5. Communication and Training
  6. Periodic monitoring and re-assessment

Level of Risk

The level of risk is often discerned as Low, Medium or High. More technical appraisals can be made by using scoring of Impact and likelihood.

Descriptors of Impact

  • Insignificant (1)
  • Minor
  • Moderate
  • Major
  • Extreme/Catastrophic (5)

Descriptors of Likelihood

  • Remote (1)
  • Unlikely
  • Possible
  • Probable
  • Highly probable (5)

Model for a Risk Table

Potential risk / L
M
H / Potential impact / Steps to mitigate risk

Trustee Indemnity Insurance

All Scout Executives have Trustee Indemnity Insurance provided as part of their membership. Scout Executive Members must be registered in the Compass Scout membership system.

What are Exec Members covered for?

  • Personal liability to make good a loss to the charity caused by their joint or several action.

What is not covered?

  • Criminal actions.
  • Acts which the trustee(s) knew (or should reasonably have known) could result in a breach of trust. Acts taken in reckless disregard of whether a breach of trust mightoccur or not.

There is no need for your Scout Group to take out insurance for public liability or trustee indemnity insurance. You are already covered

Further reading

An Insomniac’s Guide to Insurance

Safety Checklist for Scout Executives