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TOPIC: BCA Insurance Explained

BCA Insurance Explained 5 years 8 months ago #4216

  • Ian
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The following document has been written by Les W as a member of the Wessex Cave Club, for the Wessex Cave Club. Les has kindly given permission for it to be reproduced here for the benefit of members.

What is BCA Insurance and why do we it?

Background history:
In 2001 the insurance industry got a bit of a wakeup call after a few, very shocking, terrorist incidents, including the World Trade Centre and Pentagon aircraft crashes. For the first time, insurance companies realised that those impossible events that they believed would never happen, actually could happen. The insurance companies used to offset their risk on the stock market, but the volatile nature of the stock market and the .com crash between 2000 and 2002 meant that they lost significant amounts on the stock market and couldn’t rely on it to insulate them from insurance losses. They re-assessed their exposure in all areas of insurance risk, and caving was one area where they felt somewhat over exposed so they dropped the cover like a hot potato. Caving was not the only sport to suffer; they dropped lots of adventure sports cover at the same time.

Until this time the caving community had benefited from the BCRA (British Cave Research Association) insurance scheme, which was relatively cheap and provided all the cover that was required. BCRA effectively bought the block policy and then sold cover to individuals and clubs for a small fee. The changes to the insurance market were further complicated by legislative changes, which were already in the process of being implemented and were going to effectively stop BCRA from selling insurance anyway, due to regulation from the FSA (Financial Services Authority).

The loss of this insurance cover crippled organised caving, and a lot of work was carried out behind the scenes, including by several Wessex members, to try and resolve the situation. Eventually the situation was resolved, and suitable insurance obtained, but at great expense. The new National Body, the British Caving Association (BCA) was able to negotiate cover, but at a much increased premium and with a very large excess. Thankfully the insurance market has improved quite a bit since then and BCA has recently been in the position of having more than one company bidding for the business. It has to be said though that a substantial claim could still spell the end of the policy.

Why do we need it:
Anybody who remembers the period when there was no cover, will remember the problems for organised caving that this lack of insurance caused. In the Wessex we had to remove all the tackle from the tackle store and stop club caving meets as the club (and its officers) were exposed to the risk of potential litigation in the event of a claim. We still had insurance on our building, so we were able to use Upper Pitts, but we were only able to get underground as individuals and had no use of club equipment or official support from the club. We were in grave danger of becoming a “tea drinking club”… Insurance is a necessary evil, as it is the means to protect the members of the club, including the officers and trustees from any claims resulting from the actions of its members. Some access agreements require that participants have insurance and the lack of insurance prevented anybody accessing these particular systems.

In short we need insurance to ensure continued access to caves and to allow clubs and the institutions of caving to continue to operate.

What does it cover:
The current policy is very comprehensive. It was effectively written by cavers for cavers and includes all the risks you can imagine, that relate to caving (and probably some you wouldn’t imagine). The policy has been specifically worded to cover all normal activities of cavers and caving clubs, and mining history organisations, and their members, including cave diving and the use of explosives,. It also includes such things as the use of mechanical excavators and man riding winches, etc.

There are three main parts to the policy, which are there for substantially different reasons.

Firstly there is the Landowner cover. The policy indemnifies any landowner that allows BCA members on their land, against the risks to them of allowing them on the land. This includes for any caving activity such as digging or for repairing or installing gates, etc.

Secondly the policy insures the institutions of caving such as BCA and the regional councils, access controlling bodies and other specialist organisations, such as BCRA (Cave Science, publications,). This part of the policy also includes cover for club officers and trustees.

Thirdly the policy gives “person to person” cover. This means that if you are caving and as a result of your actions somebody else is injured, then the policy will cover any subsequent litigation against you (within the terms of the policy).

Why must we have cover:
The Wessex is an unincorporated club. Unincorporated clubs have no legal status as an organisation. This is why clubs need trustees to act as the holders of assets. In an unincorporated club all the members are “jointly and severally liable”. What this actually means in practice is that all the members are liable if the club was to be sued. This has been recently tested in court and a precedent has been set, so this is not an idle risk.

The Committee runs the club on behalf of the members, and in doing so, makes decisions, which place the officers first in line in any litigation; however the rest of the membership can also be sued. If an individual member of the club (such as an officer) was to be sued then they would have no option but to attempt to recover their losses from the rest of the membership. Lawyers always head for the money and people with money and/or assets are more likely to be sued.

Insurance does not protect anyone from legal action, but provides a financial safety net if legal action is taken against them. Even if a case is defeated, the legal bill can be very high. In the case of the club, insurance will protect our assets (Upper Pitts) and protect the member’s assets (houses, money, etc.) if the worse were to happen. The maximum protection is the level set in the policy, up until now that was £2,000,000 for any one claim, but at renewal (Jan 1st 2012), it is being increased to £5,000,000 cover in line with industry standards and due to the increasing needs of access bodies when dealing with landowners, especially large corporate owners such as the Forestry Commission, District Councils and the National Trust, who are insisting on this level of cover.

Without this cover the club is unable to function as a club, no decisions can be made, no club equipment can be available and the training tower will be out of bounds. Anything that potentially opens a route to litigation against members cannot happen unless the members and officers of the club agree to accept all the risks, unanimously!

The regional caving councils will not be able to carry out any works on behalf of cavers, including conservation and access works such as maintaining entrances and providing fixed aids.

The national body cannot publish advice, run any training schemes or run any conferences or other meetings. Publishing anything could leave the organisation open to litigation if the information within was perceived as negligent, libellous or just incorrect.

Access to quite a few caves will be lost as well, as it is a requirement of quite a few access agreements that BCA membership is needed to enter these caves. This includes caves such as Peak Cavern, Dan yr Ogof and also the caves of Fairy Quarry (Shatter Cave, Balch Cave, Withyhill Cave, Fairy Cave, etc.)

Why must everybody within the club be covered:
It is a requirement of the policy that in order for the club officer cover to be in place, all the members of that club must be insured. From a legal perspective, if some people are uninsured, then their assets are more at risk.
Morally of course it is only fair that the cost of the premium is shared around the caving community, as we all benefit from it, even if it is not immediately obvious how.

Why must we be members of BCA:
BCA cannot sell insurance. Rules imposed by the FSA mean that BCA would have to register with the FSA and have qualified staff in order to sell insurance, this would be prohibitively expensive. The only way that BCA can provide insurance is by making it a membership benefit. BCA pays for the premium and a contribution is collected from the membership subscription. This way, insurance is a benefit of membership and the FSA rules are satisfied. As a result of this if we want the club insurance cover then all of the members of the club must be members of BCA.

So what isn’t covered:
There are lots of different types of insurance and each is for a specific kind of risk.

The BCA insurance policy is a liability policy and a very specific one at that. It covers public liability and product liability. There are lots of other risks which are not covered by it.

It isn’t a travel policy, so rescue, medical treatment or repatriation is not covered. Snowcard is currently your best option for this type of cover.
It doesn’t cover the usual risks from being a property owner, such as damage from flooding or storms. It does not insure property against fire or subsidence or the risks of buildings injuring people or other property (perhaps a tile might fall on somebody). Buildings insurance is the specific cover required for this (Wessex already has a separate insurance policy for these risks).
The policy is not a professional indemnity policy so it doesn’t cover risks arising from taking people caving for financial gain. A professional indemnity policy is what would be required in this instance.

As regards the BCA policy, there are specific conditions and exclusions within the policy itself.

Conditions:
The policy covers liability from the use of explosives, but a condition of this cover is that you must be a member of the Explosive Users Group. It also covers liability caused by cave diving but a condition of this cover is that you must be a member of the Cave Diving Group.

Principle exclusions: Deliberate, conscious or intentional disregard for safety and/or the need to take all reasonable steps to prevent injury or damage; War, Civil War, Revolution, etc., and kindred risks; Ionising radiations, Nuclear Fuel or Waste or Explosive Nuclear Assemblies, etc.; Employers Liability; Professional Indemnity but including gratuitous advice; Libel and Slander; Terrorism; Asbestos. These exclusions are pretty much standard exclusions that are applied to most insurance policies. There is an exclusion of Libel and Slander, which used to be covered under the old BCRA policy.

There is also quite a large excess on the policy. In the case of a normal claim then the excess is £5,000, for a claim resulting from the use of explosives the excess is £10,000. In both cases BCA has funds to reduce this excess to £2,500 but cannot guarantee to do this for multiple claims as funds are limited.

More information:
There is plenty of information available on the internet if you want more information.

The BCA Web Site (www.british-caving.org.uk) has a lot of information in the insurance section including a copy of the policy, all the policy documents and a schedule of insurance:
You may find the following information useful:
Club Insurance, Why bother? (a document arguing why we need club insurance) - british-caving.org.uk/membership/insuran...6_Club_insurance.pdf
BCA Liability Insurance Scheme – Frequently asked questions - british-caving.org.uk/membership/08D1633_FAQ_2008.pdf
An example of case law established on Jointly and Severally liable: tinyurl.com/cmwsmrh
A door, once opened, may be stepped through in either direction
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Re: BCA Insurance Explained 5 years 8 months ago #4217

Thanks to Les W for posting such a comprehensive appraisal of the insurance situation. Also, for the verbal advice given to us all at the AGM. The problem of liability for people taking a leading role in adventure sports is not unique to cave exploration. It would be useful to know what the situation is for people doing hang-gliding, paragliding, rock climbing, even horse riding.

It seems to me that there could well be an argument for changes in the law to prevent the spread of litigation that would make it impossible for those with experience to encourage others with support and guidance into sports where there is any form of potential risk. It is their very experience and expertise that is so valuable to those who are new to an adventure sport. Sharing that experience through responsible leadership creates greater safety.

One way ahead may be for there to be a recognised structure of basic qualification by which expertise can be recognised. This would allow people with recognised expertise to be allowed to train others thereby building up a greater resource of expertise.
Last Edit: 5 years 8 months ago by JohnNicholson.
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Re: BCA Insurance Explained 5 years 8 months ago #4218

  • mike leahy
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hey john
i think you've got far to much time on your hands :whistle: :whistle: :whistle:
the best way to get experience is to just do it, and before you know it YOU are
the experienced one. happy caving.
you'll have to come out climbing in the summer
Last Edit: 5 years 8 months ago by mike leahy.
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Re: BCA Insurance Explained 5 years 8 months ago #4224

  • LesW
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JohnNicholson wrote:
On way ahead may be for there to be a recognised structure of basic qualification by which expertise can be recognised. This would allow people with recognised expertise to be allowed to train others thereby building up a greater resource of expertise.

There is already a structure along these lines with the professional sector of caving, with the BCA awards of LCMLA Level 1 and Level 2 (Local Cave & Mine Leader Assesment) and also the CIC (Cave Instructor Certificate) however the amateur sector is opposed to this type of formalisation.

Imagine a world in which you are not allowed to go caving until you have reached a certain qualification. If you were to have an accident without the necessary qualifications then your insurance would be invalid...

The amateur sector has fought for a very long time against the formal route of qualifications. As a result, caving remains quite anarchic and regulation free. If you want to go, you just go.
A freedom worth defending? I think so.
There is already far too much regulation in our world, it is refreshing to be able to do something away from this regulated world.
I'm a very busy person
Last Edit: 5 years 8 months ago by LesW.
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Re: BCA Insurance Explained 5 years 8 months ago #4225

  • mike leahy
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Les W wrote:
, it is refresshing to be able to do something away from this regulated world.
hear hear young(ish) man.
keep it simple
Last Edit: 5 years 8 months ago by mike leahy.
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Re: BCA Insurance Explained 5 years 8 months ago #4226

  • Hywel
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I'll second that:)
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Re: BCA Insurance Explained 5 years 8 months ago #4228

  • Marty
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I have the LCMLA Level 1
nid oes bradwr yn y ty hwn

www.darkplaces.co.uk
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Re: BCA Insurance Explained 5 years 8 months ago #4233

  • mike leahy
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martymarty wrote:
I have the LCMLA Level 1
that sums you up .
your about a level 1 in everything babe :whistle: :whistle: :whistle:
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