Question: Our secondary school is converting to academy status from September 2019. In terms of staff absence insurance, we have a choice between opting into the local authority’s staff absence mutual fund or determining our own level of teacher absence cover.
What are the pros and cons of each option, and some of the main points to consider if we do choose to opt out of the local authority’s mutual fund?
The advantage of your local authority's mutual fund is that this does not incur any insurance premium tax at 12% or any other fees that are likely to be charged by an insurance broker for arranging the insurance. These fees will vary but for larger schools can run into thousands of pounds per year.
However, an insurance policy can usually offer more cover options as opposed to a one-size-fits-all approach that many mutual funds adopt.
Another thing to bear in mind about local authority schemes is that if the fund runs out mid-year, each academy in the scheme may need to pay an additional premium which may not have been budgeted for, leaving you at financial risk or a shortage of funds for other budgeted activity,
On the other hand, if the mutual fund is in credit at the end of the year, this will normally be dispersed back to the schools as most are run as not-for-profit schemes.
We would encourage you to compare the type of cover provided by the local authority fund against an insurance broker’s staff absence cover policy to ensure you have the insurance you need or are not paying for cover you don’t need.
Local authority funds often cover all absences, whereas private insurance will adhere to a policy wording that will probably contain exclusions and terms and conditions that must be followed to ensure any claim made is valid for example, notifying the insurer of a claim within a specified time scale.
The benefit of insurance is that it is individually underwritten based on your academy’s circumstances, so if you are a school with fewer absences on average, you may be able to save money compared to a mutual fund.
One of the main advantages of using an insurance broker is that many will offer access to health and wellbeing support services. These services will usually come with access to an independent advice line that all staff in the academy can access and these services can often help reduce absences or the length of absence, in turn reducing the impact of staff absence on the academy.
We can offer tailored staff absence insurance policies designed to suit your needs and give you peace of mind. For more information visit our dedicated staff absence insurance page or speak to a specialist adviser on 0330 123 5918.
Jo Taylor is an respected insurance industry leader with over 15 years’ experience working with both education and the public sector. She is responsible for supporting her clients on all things insurance and risk related, and is also a mental health first aider qualified through Mental Health First Aid England.
Date: January 23, 2019
Category: Care and Medical