Covering the bases
One of the side effects of the economic difficulties over the last 18 months is an increased awareness of, and appetite for, business continuity planning. Jon Taylor reports on why it is always better to be safe than sorry
Aside from the economy, other external factors such as increased scrutiny from regulators and financial backers have also provided an impetus for greater preparedness for the unexpected. The possibility of a pandemic has brought sharply into focus the need for businesses, including schools, to contemplate the many potential “what if?” scenarios.
The tenet of business continuity planning is mitigation of the effects of a particular event. Disruption to business activities should be kept to a minimum to maintain the service to the customer, instilling loyalty and thereby maintaining the health of the business. The planning process should evaluate the actions required for continuity or restoration of service but will also identify any steps that can be taken in advance to reduce or transfer the risk.
What’s ahead?
The same principle is increasingly being applied by individuals experiencing greater uncertainty about their own financial futures. The obligation to pay school fees is a significant drain on the resources of many parents and an unexpected event that serves to put a greater strain on family finances could have far-reaching consequences. Maybe it is not so surprising, therefore, that means of transferring risk are often turned to during economically challenging times; one such risk transfer mechanism is insurance.
Schools can help parents in the risk evaluation and risk transfer processes by making available insurance schemes that indemnify or compensate in the event of absence from school of a pupil due to accident or illness. At one end of the scale, the short-term absences as a result of colds and flu; at the other, the more serious illnesses or severe accidents which prevent attendance in the longer term.
Giving something back
The arrangement by a school of a fees refund insurance scheme enables the school to refund fees in the event of the absence of a pupil due to ill health for a minimum qualifying period, usually between four and eight days. The ability of a parent to claim under this type of arrangement removes the prospect of a plea for a refund or a credit towards the next fee. Such schemes can also provide cover for the parent and, therefore, benefit the school in the event of closure due to epidemic or pandemic.
Keep it personal
Personal accident insurance, by contrast, is designed to compensate the injured party in the event of a permanent disability resulting from an accident. Where children are concerned, the disability will, of course, be long-term and the costs associated with the disability would, similarly, continue over a long period. If the disability is severe, these costs can be substantial, with adaptations continually required to cater for the needs of a growing child.
Personal accident insurance is commonly arranged for pupils by schools and the maximum benefits should reflect the level of compensation required to meet the possible costs of care. While these can be difficult to assess, some guidance is provided by the Ogden Tables (used by the courts in assessing compensation for personal injury and fatal accidents) and a maximum benefit of £2,000,000 is now available under one established scheme.
Take care
As with all insurances, care should be taken when arranging pupil insurance cover to ensure that the cover provided meets the needs of the insured. Established schemes provide reassurance in this regard and it should be borne in mind that the value of such covers does not, unfortunately, diminish in times of economic difficulty.
Indeed, the opposite can be argued and the cost benefits of arranging cover through school schemes is a way in which schools can add value in these competitive times.
Jon Taylor is head of sales and marketing at HSBC Insurance Brokers’ specialist education practice. Joncan be contacted via enquiries.schools@hsbc.com.
Return to Risk
