Nurseries not covered by insurance for coronavirus closures

Mr Fraser has been told by his insurer Morton Michel that it would not cover loss of revenue or staff wages if the setting is ordered to close by the Government due to a confirmed case of Covid-19 within the setting.

This is because policies only provide cover in respect of certain ‘notifiable human infectious or contagious disease’ – outlined in policy documents.

Pounds Gates also confirmed its insurance policies do not cover for any increased costs or lost revenue due to interruption to businesses caused by Coronavirus.

Childcare settings would also lose any income from fees as well, as it is understood that parents would not be liable to pay if the Government ordered them to close.

Mr Fraser’s concerns come after the health secretary Matt Hancock told the BBC over the weekend that if the Coronavirus spreads further, in order to contain the virus, schools would close, however this would only happen in a worst-case scenario. Reports suggest that schools could close for as long as two months. 

At present schools have been told not to close unless there is a positive case.

The nursery director is now urging the Government to ensure providers receive compensation and has written to the MPs where his nurseries are based outlining his concerns.

However, reports today suggest billions of pounds could be made available by the Government to ‘prop up' businesses economically impacted by the virus. The Chancellor Rishi Sunak has revealed he has changed his budget plans in order to release the money. The budget is due to be delivered next week.

Mr Fraser told Nursery World, ‘We are concerned that schools and nurseries may be closed in the near/medium future to help slow the spread of the Coronavirus. If we are closed down, none of the nursery insurance schemes in action for the sector will cover us for loss of revenue.

‘However, parents would have to pay their normal fees if their child had the virus and could not attend, as per our current sickness policy, or if the family had taken the decision to self-isolate’, he explained.

‘It would be very reassuring if the decision to close down the sector is accompanied with a simultaneous announcement about compensation as we and our staff are already very anxious about this issue.’

'Guarantee statutory sick pay'

Unison has also called on the Government to guarantee all staff statutory sick pay if they have to self-isolate because of Coronavirus fears.

General secretary Dave Prentis has written to the minister for work and pensions Thérèse Coffey asking her to amend the rules, so employers have to recognise the time off as sick leave and provide wages for workers from day one.

They should also pay employees regardless of how much they earn of their type of job contract, he says.

An estimated 2 million people currently do not earn enough to qualify for statutory sick pay, and Unison warns many could lose earnings as a result of the coronavirus unless rules are changed.

Labour and the unions have also called for the Government to provide sick pay for self-employed workers. The current advice for workers with no sick pay who suspect they have the disease is to claim universal credit. The alternative would be employment and support allowance, which requires claimants to have two to three years of National Insurance contributions.

Planning for the spread of coronavirus

The Government has published its coronavirus action plan today and announced that emergency legislation will be brought forward this month to suspend rules on class sizes in order to let teachers take on additional pupils from sick colleagues.

The rules around staff: pupil ratios in childcare settings could also be relaxed if the virus spreads to ‘pandemic levels’, according to the Department for Health and Social Care.

The Early Years Alliance said it hoped any decision made about relaxing ratios in early years settings would be ‘considered and well-thought out’ and not simply a ‘knee-jerk reaction that ignores the specific care needs and requirements of very young children.’

Today the Department for Education (DfE) also launched a new helpline to answer questions about the Coronavirus related to education. The helpline is open to staff, parents and young people and the number is 0800 046 8687.

It follows updated guidance for educational settings published last week, which includes advice about what to do if a case of Covid-19 (pupil or staff) is suspected or confirmed in a setting and what to do if pupils, students or staff are contacts of a confirmed case who was symptomatic while attending the setting.

Sector comments

In a joint statement, National Day Nurseries Association (NDNA) and Pound Gates said, ‘NDNA and Pound Gates are aware of a lot of concern about the implications for nurseries of the new coronavirus, Covid-19.

‘As a new communicable disease it is very likely that this will not feature in standard business insurance cover.

‘As a responsible insurance intermediary Pound Gates took steps last week, in response to a growing number of enquiries from its clients (many of whom are NDNA members), to advise that its nursery insurance policy, underwritten by Ecclesiastical Insurance, does not provide insurance cover for any increased costs or lost revenue due to interruption to your business caused by the coronavirus (Covid-19).

‘NDNA has been in contact with Government officials across the UK to raise concerns that nurseries have about insurance cover as well as the impact closures could have on funding for childcare places. The current advice remains that schools and settings don’t need to close but we know the situation is changing daily and have been urging governments to include support to the sector in any contingency plans.’

In a statement, Pound Gates added, ‘We appreciate this position is concerning for nursery owners at such an uncertain time and we feel it is important to provide a general explanation as to why this is the case. Whilst all insurers differ in the detail of their approach, they are all required by their shareholders and regulatory bodies to operate in a commercially sustainable way. This is to ensure they are able to meet the cost of insured claims in the long-term and thereby provide continued protection for their policyholders. 

‘Insurers use historic data to guide them in terms of the cover they are able to offer and the pricing of it. Where new diseases (or new strains of known diseases) emerge there is, by definition, no historic data available for insurers to be able to predict the potential cost of claims from a UK or worldwide pandemic. The potential therefore exists that if the insurance industry did provide unrestricted cover for a pandemic disease event it would result in their mass failure, leaving policyholders unprotected against other events. It is therefore the case that remedies for issues of this magnitude and extent fall towards the Government to be able to respond on a societal basis.’ 

The Professional Association of Childcare and Early Years (PACEY) said it had received calls from members exploring potential scenarios.

Chief executive Liz Bayram said, ‘We have advised our members that their usual contract terms for managing the ill health of staff or children in their setting still apply when dealing with any cases of Covid-19. 

‘If a case is confirmed in your setting, then Public Health England’s Protection Team will advise you on what to do. They will make an assessment of your setting and use that to decide what the best action to take is. However, we want to make it clear that DfE’s current guidance is clear that in most cases it will be unnecessary to close a setting.’

Department for Education comment

'We have set up a dedicated helpline for parents, teaching staff and education leaders to provide advice and support on Coronavirus.

'This line complements the advice being provided by Public Health England and the regular updates we have been sending to all educational settings since the start of February.'

• The DfE Coronavirus Helpline: 0800 046 8687