Panic stations

Governments around the world have spent billions of dollars on research to establish effective protocols to cope with the next expected human influenza pandemic. Jon Taylor explains what schools can do to protect their business

The outbreaks of avian flu in 2005, and SARS before that, have focused the attention of the public on the possible social and economic consequences of pandemic flu, even before the more recent emergence of swine flu.

The spread of swine flu has, of course, been rapid and widespread from its origin in Mexico, to the US, Canada and on to Europe and the UK. It has been recently reported that the UK now has the third highest number of swine flu cases after the US and Mexico. While recent figures for new cases indicate a decrease in infection rates in all age groups and regions of the UK, further waves are widely anticipated.

Thankfully, the majority of cases of the current strain of swine flu have been and continue to be mild with, according to the Health Protection Agency (HPA), no sign that the virus is becoming more severe or developing resistance to anti-virals. One feature, however, has been the high incidence in the young and this has clear implications for schools.

Under control
Containment policies have so far proved largely effective, but schools will be aware of the possible effects of pandemics on their business. Contingency plans should have been written or adapted in anticipation of the possible consequences, such as disruption to travel plans, difficulties with supplies and, of course, the absence of pupils and staff that could ultimately lead to school closures. Continuation of the business of education through remote teaching is a possibility that many schools will have considered and planned for, wherever possible.

Schools will have concerns about the possible effects on income of pupil absences and should have looked closely at the provisions in their parent contracts. The force majeure clause is, of course, relevant. But what can schools do to offer parents the opportunity to recover school fees if pupils are absent through illness or, indeed, in the event of school closure as a result of an epidemic/pandemic outbreak?

The small print
Parent contracts generally exclude repayment of fees in the event of the absence of a pupil from school through illness or injury. For many years, however, schools have been able to offer parents the possibility of recovering fees on payment of an additional charge, with the school arranging an insurance policy to meet any liability to repay fees.

Such policies often also enable refunds, should it be necessary for a school to close due to an epidemic among the pupils. The terms of these policies vary, but commonly the premium is based on the level of fees paid, with repayments subject to a minimum period of absence.

Schools still have the opportunity of arranging this type of insurance coverage and, perhaps not surprisingly, there has been much interest recently in introducing schemes that operate on either a compulsory (for all pupils) or an opt-out basis (the charge appearing on the fee bill, with parents having the option to delete it if the protection is not required). While refunds are generally paid only in the event of an outbreak at the school and not, for example, in the event of a pupil not attending due to fear of infection, parents perceive a heightened risk of absence and it is anticipated that the numbers of parents wishing to take up the option to recover fees in specified circumstances will increase. By facilitating this, schools will be able to preserve the goodwill of their parents and resist pressure to refund fees at their own expense.

As always, it is important that schools seek specific advice on their individual requirements and it is always necessary to read the contractual documentation issued by underwriters for full details of the product and cover.

Jon Taylor is head of sales and marketing at HSBC Insurance Brokers’ specialist education practice. Jon can be contacted via enquiries.schools@hsbc.com. 

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