Rise in golf club insurance claims puts renewals in the rough

Premiums increase by as much as 35% in response to insurance providers ditching the golf market.

The Sussex coastline boasts some of the country’s finest golf clubs for amateurs and professionals alike. With unequalled views of the sea and South Downs, it’s no wonder these clubs are popular venues – not just for their fairways, but for dining, functions and charity events too.

But in recent months, wayward putting hasn’t been the only source of concern in the nineteenth hole. Golf club owners have also been sweating over rises in insurance premiums which, according to some specialists, could increase by as much as 35 per cent at renewal time.

To many, this has come as no surprise. With a steady climb in claims relating to clubhouse break-ins, damage to playing greens, and theft of golf equipment, many insurers have withdrawn from the market based on a high historic loss ratio – leaving golf club owners and operators somewhat in the bunker.

Impact of a restricted market

When asked about the rise of insurance premiums for golf clubs, Noel Preston, Managing Partner at Preston Insurance Brokers, explained: “Insurance providers are initially attracted to the market because of the high rates and potential for profit.

“But within two or three years of offering schemes to sports and leisure businesses, they often leave under the financial strain caused by claims that far exceed premiums.

“What’s left are fewer insurance providers with larger market shares in an advantageous position to set higher premiums, often with restrictive terms and conditions that may fail to cover every type of risk.”

The rise in claims has caused insurance providers to become much stricter, with the majority demanding upgraded security and fire suppression systems before a premium can even be quoted.

This all comes as another expense for golf club owners who, for the foreseeable future at least, join many other leisure industries suffering the strain of sky-rocketing premiums.

Not all schemes are up to scratch

Many schemes for golf club venues provide cover for standard disruptions to business, such as damage to clubhouses, playing surfaces and machinery. But Noel shares concerns that the level of cover may not always be adequate or accurately reflect the risk.

“Not all self-placed policies account for every type of eventuality, namely cover for compulsory course alteration and road traffic liability to name but two. For this reason, I’d always recommend contacting a broker to advise on the policy options available for the right type of insurance and level of cover required for your Club,” he said.

“Not only does it provide golf club owners with a peace of mind their bespoke policy will cover a claim but it also means they’re likely to secure a more affordable premium, with brokers having access to more providers for both specialist schemes and standard policy options, albeit within the current restricted market.”

Planning for a reduced renewal

Although rising insurance costs have left a divot in many club owners’ finances, there are several ways to cut the cost of a premium, while still retaining a suitable level of cover.

Whether it’s an independent rural course without a clubhouse or an established multifunctioning venue with a long list of assets, preparing for a renewal by implementing additional risk management processes and security systems can, over time, pay for itself.

As Noel explained: “One of the most common claims we see alongside stolen golf machinery and equipment is significant fire damage to clubhouses and other structures within golfing venues, often caused by commercial kitchens.

“By investing in high-end automatic fire suppression systems that help tackle fires without human intervention, insurance providers are more likely to offer a policy to golf club owners at a reduced rate or at all!

“Similarly, the addition of security systems to protect plant, machinery and high-value equipment in pro shops all helps to make a venue more appealing to insurance providers.”

Stronger together

To combat rising premiums, many golf club owners and operators are active members of the Golf Management Group (GMG) – a purchasing alliance that gives UK golf clubs the opportunity to access discounts without sacrificing on quality.

As a trusted partner to GMG, Preston Insurance Brokers are a preferred option for venues such as Mid Sussex Golf Club and Gatton Manor Golf Club, both of which benefit from access to specialist schemes and wholesale broker facilities that go beyond a standard umbrella policy.

Noel added: “One of the reasons GMG have chosen us as a partner is because of our personal approach. For us, it’s about getting to know the clubs, their attitudes to risk, and coming up with a range of options that best protect pockets and the Club.”

If you’re a golf club owner or operator wanting to discuss your insurance renewal with Preston Insurance Brokers, feel free to call Paul Morriss on 0333 222 1183 or email paul.morriss@prestonib.co.uk.