Exposure to Risk

There is risk in everything we do. Risk is not a finite thing; rather it is woolly and unpredictable. It must be managed. Risk ranges from "An invitation to disaster" right across to "All holes in the dam wall of risk plugged as well as possible".

Potential areas of risk: It is almost impossible to produce an exhaustive list of all potential risks that may apply to an incorporated association, as there are so many variables. However, common examples of categories of risk include:

  • individual and public health and safety;
  • potential for error or accident;
  • potential for damage;
  • potential for litigation.


The PaddleNSW framework is aimed at reducing the risk factor as far as possible. It can't be done completely. These are things we can do:

1. Adopt Incorporation which is devised by the NSW Government to protect groups in our situation. (Remember the NSW Government also runs the judicial system)

One of the benefits of incorporation is that members (including management committee members) and office bearers of the association are generally not liable for debts or liabilities of the association. The most common form of liability incurred by an association is liability under contracts that it enters into. An association may also incur liability under tort law, e.g. for negligent acts done by the management committee, employees or volunteers. An association can also be liable under criminal law, for example, for fraud.

However, management committee members are not immune from personal liability. They have a duty to fulfil the functions of their office to the best of their ability. If a committee member or officer acts in bad faith or contrary to the rules of association, he or she may incur a personal liability, for example, if an officer enters into a contract against the instructions of the management committee. Likewise, if a management committee member acts negligently in the performance of his or her office, he or she may be held personally liable for any resulting loss or damage.

2. Get the right insurance.

PaddleNSW carries an insurance policy through Australian Canoeing which is the most suitable for our sorts of activities. All Incorporated clubs which are affiliated to PaddleNSW automatically have this insurance cover.

Buying insurance is one part, but not the only part, of a risk management programme. By paying the premium, the insured transfers some of its risk to a third party insurer. In many cases, effective practical strategies for reducing risk, such as safety protocols and security devices, can work together with insurance to reduce risk exposure. Indeed, some risk management strategies may result in reduced insurance costs by reducing the likelihood of claims.

3. Risk Management

'Risk management' is a term used to describe a formal and structured process of identifying and managing risk. Generally speaking, it involves assessing, and then actively managing, an organisation's potential exposure to loss, damage or litigation.

There are a number of basic steps involved in the process of managing an incorporated association's risks. It is essentially a process of identifying each risk, evaluating each risk, deciding what actions need to be taken to address or reduce each risk and constantly monitoring and reviewing the process.

  • Identify each risk. This requires an analysis of the association's operations, activities and business. The aim is to identify what goes on in the association, what risks it is exposed to, what kinds of events occur that may present risks, and so on.
  • Assess risks and consequences. Assessment requires balancing the likelihood of a risk occurring against the potential consequences. The association needs to decide which risks it will act upon and which risks it will ignore. For example, an association may choose to avoid a risk by not continuing with a particular activity, or determine that the risk is so unlikely to occur that it does not require any action.
  • Treat risks. The association then needs to decide how it will deal with and manage each relevant risk. This involves considering any existing risk control measures (eg insurance, wearing of lifejackets), deciding whether the existing measures are adequate, considering any additional measures that may be required and so on. This is also an exercise in balancing cost with consequences.
  • Monitor and review the process on a regular basis. It is important to regularly review if there has been any change in the association's risk position and, if necessary, repeat and review the process set out above.