COVID-19 has forced many estates to accelerate ways of developing new revenue streams but these activities could bring new risks.
Just as savvy investors look to diversify their investment portfolio, equally savvy estate owners have embraced the idea of diversifying their income streams. Relying on the wedding market for the bulk of an estate’s revenue, for example, has exposed many estates to an almost complete loss of income over the last nine months. But while diversification makes commercial and financial sense, estates can’t afford to overlook the risk and insurance implications of expanding their activities.
Open gardens to branded merchDiversification for many estate owners had been underway well before the ravages of COVID-19 struck. From open gardens, to farm shops, glamping, letting estate properties, and nurseries, through to developing own brand food produce and branded merchandise, many estates have successfully expanded beyond simply opening their house to the public or operating as a venue for special events.
As the pandemic has proven, those who had also managed to introduce an online element to complement their diversification are the ones who have fared better as it has, in many cases, allowed at least some level of income to be generated.
While it might be making produce and merchandise available online, some estates have also used their websites to repackage some of their more conventional attractions to sell virtual house tours. It’s been about using tech to create an experience that people will pay for such as creating virtual Father Christmas experiences in lieu of the usual Santa’s Grotto. Or working out how tech can support in-person events when circumstances allow by allowing guests to pre-book time slots to visit.
Many estates were already diversifying but COVID-19 has been a real catalyst for change and will leave its legacy in how estates operate and embrace the different offline and online opportunities.
Check your insuranceHowever an estate chooses to diversify, one important consideration should be on how the change of use of their facilities, or the shift to online could impact their insurance and risk management. From an online perspective, cyber insurance that can protect an estate from the financial and reputational hit of being hacked is valuable, not least because a good policy provides access to the IT, legal and PR expertise that few estate offices will have ready access to.
Checking that existing insurance policies like public liability will cover any changed use of the estate house(s) or grounds will also be key. Having a claim and then finding out an insurance policy will not cover the claim is no way to diversify the business and help its profitability.
Review workplace hazards
Making sure a thorough risk management process is run across any new activities is also an important part of diversification, particularly given the challenges of the pandemic. The Health and Safety Executive requires all employers to take reasonable steps to protect employees and the public from COVID-19.
That means asking questions like:
- What personal protective equipment do you need to provide for staff?
- How can you make sure everyone sticks to social distancing rules – does this mean staggering start times/shift patterns for example?
- How can you make sure hygiene rules such as regular hand washing are followed?
- How do you deal with areas like lifts and corridors where people move around?
- How will car parking be managed?
Keeping comprehensive records of the approach to health and safety is important, as is documenting any problems and the solutions put in place to prevent any future issues. More advice can be found via Aon’s COVID-19 advisory for UK clients.
The way to a sustainable future
If your estate is planning a new activity, don’t wait until the website is launched or the first visitors arrive – either virtually or in-person – speak to your insurance broker to make sure that the idea won’t end up being more liability than profitability.
Get it right though and the creativity and imagination fueled by the response to the pandemic could mark an exciting new era for estates and contribute to ensuring a more sustainable future.
To find out more about how Aon can help protect your estate, contact us today.
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.
This article has been compiled using information available to us up to 20/01/21.