Redwoods Responds

In Uncertain Times, We Need to Support Each Other

When the pandemic hit in the Spring of 2020, it quickly became clear that it would profoundly impact every corner of society—including the youth-serving community organizations we serve. That’s why we launched Redwoods Responds—a new pricing initiative that offered our customers flexible payment terms and returned premium credits at a time when many were operating at a significantly lower capacity with modified operations—meaning their exposures to loss had changed too. The result was millions of dollars in returned premiums, as well as significant adjustments to short-term pricing moving forward.

If you missed our Redwoods Responds webinars, please feel free to watch and share the recordings.

Here’s How Redwoods Responds Works

Redwoods Responds was designed to offer relief on multiple fronts:

1.  Adjusted Premiums Based on Projected Programs

Because COVID profoundly changed our customers’ operations, we provided the opportunity to adjust off-site related exposures based on best projections for the upcoming policy year. Often, these projections reflected a lower exposure to General Liability and Workers’ Compensation losses, and therefore lower premiums. (Customers could also work with their brokers to submit an endorsement request at any time if there were significant changes to exposure not predicted at renewal.)

2. Returned Premiums Based on Short-Term Changes

Prior to COVID, the GL portion of our customers coverage was often calculated using either square footage, Average Daily Attendance, or camper days as a proxy for exposure. Because COVID shutdown normal operations, there was now a mismatch between premiums being paid and exposures. Starting in the Spring of 2020, we initiated a program of premium credits and adjustments that included an initial across-the-board adjustment to GL premiums of 15%; a program of returned premiums for summer camps based on their actual camper days, and then an ongoing initiative of premium credits for YMCAs, JCCs and Boys & Girls Clubs based on either reported program revenue or Average Daily Attendance every four months, compared to the same period a year earlier. (Program revenue is defined as all revenue, minus philanthropic and government funding.)

3. Responsive Payment Terms

Because we also knew that cash flow would be a challenge when revenues were down, we also worked with customers to establish a lower monthly payment, allowing future credit to cover the amounts that would otherwise have been owed.

What’s Next?

For each new round of Redwoods Responds GL Premium Credits, Redwoods is sending a form to all eligible organizations. There is nothing you need to do until then to take advantage of this offer.

Some Frequently Asked Questions

Q: Who is eligible for Redwoods Responds?

A: Almost all of Redwoods customers will be eligible. Customers whose GL premium was rated based on the square footage of their buildings will be eligible for GL premium audits and associated credits. Many resident camps—whose GL premiums are not based on square footage—are not be eligible for this specific aspect of Redwoods Responds, but they can submit requests for exposure changes through their broker/agent as an endorsement. As we did in summer 2020, we will continue to monitor and reduce GL premiums for camps associated with camper day adjustments. Just like all of our customer groups, we are willing to work with our camp customers to explore flexible payment terms if cash flow has become an issue.

Q: My policy already renewed, am I eligible?

A: Yes. This credit will be retroactive, and we will seek to determine a customer’s actual exposure for premiums that have already been charged during this time. 

Q: Why is Redwoods now looking at alternative metrics to calculate premiums?

A: Many of our customers’ liability premiums are largely calculated using the exposure base of square footage. Square footage generally serves as an adequate proxy for calculating a good bit of the risk their organization faces. However, when an organization is operating at reduced capacity or with modified programming, the square footage is not being fully used and therefore no longer equates to the amount of risk being faced. Alternative metrics such as program revenue, participation rates, Average Daily Attendance and payroll can serve as a proxy for your exposure and will allow us to recognize the uncertainty of your future programming activity across manageable time periods. They will also give you the confidence that your liability insurance costs will be reflective of your actual operational exposure to loss.

Q: Will my premiums increase after a 4 month audit if my program revenues increase?

A: No. Each account will be rated per our guidelines to collect an adequate premium. If revenues increase over what was initially anticipated, there will be no penalty or increase. The audit will only help us determine the amount of premium to return.

Q: How long will Redwoods Responds last?

A: When we launched Redwoods Responds, we said that the program would last for as long as the square footage exposure base is a less-than-accurate proxy for exposure to loss. As most communities are now emerging from the pandemic, we believe we should see operations begin to return to pre-pandemic levels of exposure. For this reason, we anticipate that the premium credits may be ending soon. However, we are keeping this under review, depending on how the situation on the ground changes.