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Insuring a Day Nursery overview by Morton Michel
When buying Nursery Insurance, you might want to consider the following:
- The Public Liability limit of indemnity – how much do you need? Policies usually come with £3m or £5m and options to increase to £10m. There is no statutory guidance on this but £3m should probably be the minimum and many nurseries are opting for £5m.
- Contents, Loss of Revenue and Buildings. Make sure you insure for the full replacement value. If you are underinsured, you will be penalized in the event of claim. A simple example – you have insured for £20,000 of equipment but you actually have £40,000. In the event of any claim, the insurance company will only pay out half the claim. Claim £5,000 and they will give you £2,500.
- Buildings sum insured. You should insure for the full replacement cost of the building, not its market value. Your builder, architect or mortgage company should be able to assist. If not, you could obtain a valuation from a surveyor.
- Keep an accurate inventory and purchase receipts for your equipment. This can speed things up considerably in the event of a claim.
- Vicarious Liability. Does the policy cover you in the event that you are held liable for the criminal actions of your employees? For instance, if an employee assaults a child and you are held to be vicariously liable, does your insurance policy cover this?
- Is there a No Claims Discount scheme?
- How competitive is the premium? Price might not be the sole guide – for instance, there is a difference between buying a policy with a Public Liability limit of indemnity of £2m and one with £3m – but
it is obviously important.
- Does the broker or company you are dealing
with understand the nursery market? Do they have expertise in this particular
field? Would they know the difference between an epipen and a crayon or between
an EYDCP and Ofsted?
A final word…..Premiums have been stable for a few years, after considerable rises in the early years of this century. But continuing high compensation settlements in the courts together with the high cost of settlements from this years floods, are likely to put pressure on companies to increase premium rates over the next twelve months. However, any well managed nursery, with proper risk assessment and Health and Safety procedures in place and with a good claims record, should still be able to obtain a fair price for their insurance.
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