The Effect of CARES Act Spending on Your Tribe’s Risk Profile | M3 Insurance

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The Effect of CARES Act Spending on Your Tribe’s Risk Profile

Property & Casualty

You put your CARES Act dollars to work in a way you felt best for your people and businesses, doing the best you could to spend in accordance with the often vague eligibility guidelines. The plans are set in motion, and now your Tribe has new buildings under construction, is hiring staff in certain areas and is expanding operations to help mitigate the effects of COVID-19 on your community.

As your infrastructure begins to change based on your spending, so does your exposure to risk. These risks might be new to your organization or amplifying current risks. Take some time today to think about how your Tribe’s CARES Act spending can have an affect on your risk profile and your premium spend down the road.

Consider the decisions below and their respective increased exposure to risk.

Tribe A: “We brought on more staff in the clinic and offer more services than we did just a few months ago.”

The addition of medical staff and expansion of services increases your medical malpractice exposure. In most cases, more staff results in a greater workers’ compensation exposure.


Tribe B: “We are building a new emergency management center to help with our communication and response to future events like this.”

It is obvious to expect your exposure to property loss to increase. It is worth noting that as property rates continue to rise, the addition of this property to the schedule of insured locations can be costly at renewal.


Tribe C: “Our Tribe used some of the funding to buy two new fire trucks and equipment.”

This purchase increases your risk portfolio’s auto liability and auto physical damage exposure. If additional fire fighters are hired to fill new positions, your workers’ compensation exposure could be affected depending on how your workers’ compensation ordinance/law is written with respect to fire fighters.


Tribe D: “Our Tribe provided laptops and tablets to students, some employees, and a few tribal members so they can have access at home.”

Be aware of your greater exposure to breach and/or ransomware with take-home devices. The usage activity on these devices can be hard to manage and the click of a “bad link” could welcome a breach to your organization. Make sure you have adequate cyber liability coverage in place to respond to such an incident.


Tribe E: “We have never had a youth center, so we are building one to provide our community with better access to child care and after school activities.”   

Again, increased property and workers’ compensation exposure is assumed. But here, consider the often overlooked cost of sexual misconduct coverage when bringing on more staff to interact with the children in your community.

Takeaway

The positive and necessary changes that have been made, and will continue to be made, to battle this deadly virus will have an impact on your exposure to loss and insurance premiums. Keep this in mind as you move forward with CARES Act spending, review budgets or go through insurance renewals.

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