Please be aware that although the dot2dot offices are closed, the team are still working remotely and you can contact them on their direct dials and also through the switchboard number.
29/09/2020 dot2dot Statement Regarding the FCA Test Case
“We announced in July 2020 that the dot2dot insurance policy wording was not being contested by the FCA and was therefore not subject to the test case.
As previously explained, the dot2dot insurance policy provides 2 extensions in the absence of physical damage. The first is for losses following the prevention or restriction of access to, or closure of, premises by the Government. However, this extension expressly does not apply in respect of any action taken in controlling, preventing or suppressing the spread of disease. The second is for losses caused by certain listed specified diseases. However, the list does not include Covid-19.
The Financial Conduct Authority (FCA) Business Interruption (BI) Test Case judgment on 15 September 2020 has therefore not changed the above.”
04/09/2020 – BLM webinar for dot2dot clients
We appreciate that these are challenging times for businesses and employment law can often be as difficult to navigate.
With over 23 years’ experience and expertise in employment law, Julian Cox, Head of Employment at BLM London is co-hosting this webinar with dot2dot’s Jackie Hyde. Both speakers have a high level of empathy and understanding for the issues that nursery owners, finance directors, risk managers and HR professionals need to be considering amidst the continuing pandemic.
With lockdown measures easing, there are a number of steps nurseries can take as they look forward to the autumn. Julian believes effective planning will help achieve a smooth return to the workplace environment and assist in avoiding further disruption to business operations.
In this Q & A session, Julian offers help and guidance to ensure you and your business will be as prepared as possible.
Topics covered include:
- Reviewing staffing requirements and staffing levels, including making redundancies
- Making changes to terms and conditions of employment
- Dealing with staff returning from furlough
- Handling staff reluctant to return to work
- Dealing with whistleblowing complaints
- Provision of employment and the law, training for management
- Updating Staff Handbooks, employment policies & procedures
Catch up on the webinar here – http://dot2dot.org.uk/blm-webinar-life-after-lockdown-september-2020/
16/07/2020 – FCA Business Interruption Test Case, Letter from Aviva
Message from Jackie Hyde, Managing Director dot2dot
We have endeavoured to keep you updated on various matters during the troubled times of the Covid19 lockdown and also since nurseries have been reopening or expanding their services from 1 June 2020. Our Scottish and Welsh clients have had to wait a little while longer to reopen beyond keyworkers.
It is clear from many conversations with our clients, nurseries are working extremely hard to deliver their usual caring services again but now in a new format.
It hasn’t been forgotten myself or my team, how upset our clients have been during the last few months due to the fact the dot2dot policy could not respond to Business Interruption losses resulting from the Covid19 situation. Your frustrations were and still are totally appreciated by us. We are sure lots has happened for each of you and to be honest, a huge amount has happened within the insurance industry relating to this issue, which we have been watching carefully here at dot2dot. It, therefore, felt appropriate to give you an update with the recent situation.
Due to all the issues raised by our dot2dot clients, we decided with the approval of our insurer Aviva, to submit the dot2dot policy to be considered for the FCA Business Interruption Test Case. Our policy was not taken forward and following further discussions with Aviva, it is appropriate to link to a letter recently received by them explaining the present position.
Read the letter from Aviva here – http://dot2dot.org.uk/wp-content/uploads/2020/07/Aviva-Business-Interruption-Letter-Regarding-FCA-Test-Case.pdf
13/07/2020 – Open or Closed, Unoccupied Nurseries Update
Following our email of 5 June 2020, we are aware that a number of our client’s childcare settings remain closed. Aviva have therefore agreed to further extend the unrestricted cover for unoccupied premises until 5 August 2020.
For any client unable to open by 5 August (including those that have been closed throughout lockdown and now won’t be re-opening until after the school summer break), Aviva have confirmed they will grant a further extension to 30 September 2020, following receipt of a short questionnaire which will need to be completed for each closed setting.
Please note cover required for unoccupied premises past 5 August 2020 will be subject to the following condition, which will be applied to your policy schedule:
COVID 19 – Temporarily Unoccupied Premises Condition
If in relation to any claim for Damage whilst The Premises are Unoccupied, you have failed to fulfil any of the following conditions, You will lose Your right to indemnity or payment for that claim.
Carry out internal and external inspections of the buildings as least every seven days and
- maintain a weekly log of such inspections
- immediately repair, or arrange to repair, any defects found
- in the buildings, including removal of graffiti
- in the security or alarm or fire protection installations.
- remove all waste either within or outside the buildings, from the Premises.
- securely lock all external doors, close and secure all windows.
If you have any problems in being able to comply with these requirements, then please let us know prior to 5 August 2020 to avoid any issues should a claim occur. As always if you have any questions please don’t hesitate to get in touch with me or the team at dot2dot.
19/06/2020 – BLM Webinar Life After Lockdown 1
Our friends at BLM ran a webinar recently titled ‘Life after lockdown: Using employment law to make sure your business comes back stronger’.
BLM have kindly provided access to recording for us to share with you.
The webinar covers:
- The revised furlough arrangements
- Redundancy consultation while on furlough
- Pools and selection methods to keep the right people in your business
- Disputes surrounding a request to return to the workplace
- Pay reductions and other changes to employment terms
- Ensuring appropriate health and safety measures are in place
- Formalising home working arrangements
- Updating employment contracts, policies and procedures in light of COVID-19.
Watch the webinar here: https://www.blmlaw.com/insights/events/employment-webinar-2020
05/06/2020 – Temporary Closure Of Childcare Settings Due To COVID-19
As you know on 24 March 2020, we announced our insurers Aviva had granted 90 consecutive days unrestricted cover in respect of any temporary unoccupied premises due to Covid-19.
The majority of our nursery clients either remained opened for the care of keyworker’s children or have reopened their premises from 1 June 2020. We are conscious the 90 days period is coming to an end but in some cases, particularly our Scottish nurseries, your premises remain closed. Aviva are willing to extend the cover, but it is important that we now understand which of our nursery clients remain closed.
To remove any immediate concerns, we have agreed with Aviva a further 30 consecutive days unrestricted cover. If cover is required beyond this date, we would ask you to contact the dot2dot office on 01204 570390 or your Account Handler on their direct dial, so we can discuss your individual requirements.
27/05/2020 – Support to help you re-open your nursery post COVID-19. More Information here
26/03/2020 – Government Support for the Early Years Sector
Below is the latest blog from the specialist Corporate Law, Childcare team at Brabners Solicitors. You can read and share the blog online here – https://bit.ly/BRABNERS
With the country on lockdown and nurseries restricted to all but key workers’ children, virtually every nursery will be suffering. The government has announced a series of measures designed to help businesses through the current crisis, but many have yet to have the details fleshed out. This is perhaps understandable given the scale of the problem and the ambition of the measures, but it does add to the climate of uncertainty. From what has been announced so far, there are a number of measures that could assist nurseries.
Early Years Entitlements
Early Years Entitlements will continue to be paid, notwithstanding nurseries may have to close. Depending on the make-up of a nursery’s intake, this could make a significant difference. In any event, it is likely to make a sizable contribution towards covering the fixed costs of a nursery should it decide to close its doors.
Job Retention Scheme
The Job Retention Scheme will see the government reimburse businesses 80% of the wages of employees (up to £2,500 per month) if they are furloughed i.e. sent home but retained as employees. If nurseries combine this with a mutually agreed salary cut it could see staff costs for furloughed employees reduce to zero. Salary cuts may seem an extreme measure, but the net effect on employees may not be as severe as it sounds if they do not have to incur expenses associated with their work, such as travel. If you are planning to change employee’s terms, we recommend you seek advice from a specialist (such as a member of our employment team) before doing so.
Coronavirus Business Interruption Loan Scheme
The government says that payments to businesses under the Job Retention Scheme will begin at the end of April. But in the meantime, businesses still have to pay employees. This could cause significant cash flow issues if no income is being received. In practice, this may be the main reason businesses seek assistance under the Coronavirus Business Interruption Loan Scheme.
This is a scheme offering loans of up to £5m with the first 12 months of the loan being interest-free. The precise lending eligibility criteria are still to be set out (much to the frustration of businesses and banks) but in general, it is thought they will only be available to businesses who are viable and have a plan to repay; short term finance to cover the period until the Job Retention Scheme payments kick in seems to satisfy this requirement. If this is of interest, businesses should speak to their bank, it may also be beneficial to speak to a finance professional to assist with any application.
Business Rates Holiday
Although initially excluded, nurseries are now to receive a business rates holiday for 12 months from 1 April 2020. It will be administered by local authorities with no need to apply.
Nurseries are still excluded from the grant scheme for businesses in the retail, hospitality and leisure sectors, but there are grants of £10k available for businesses receiving small business rates relief. Local councils should be in touch regarding these as there is no need to make an application.
Commercial Forfeiture Moratorium
Legislation is due to be passed that will prevent landlords foreclosing on leases due to non-payment of rent until the end of June 2020. This could provide breathing room for delaying rental payments, but it is always advisable to have an open dialogue with landlords if you wish to delay rental payments. If you are looking to stop rental payments without landlord agreement, we would advise you speak to our Real Estate Team to ensure there are no nasty surprises.
Loan Repayment Holidays
Most high street banks are offering their customers loan repayment holidays to help with cash flow; if you have outstanding loans you should speak to your bank if this is of interest.
We are living in uncertain times and the government is introducing unprecedented support to businesses, but guidance and details are still not clear, and the situation is changing every day. Our Childcare Team is on hand to help, so get in touch if you have any questions.
Thanks to Brabners for their insight. If you want to speak to directly or you have any specific queries, the author of this piece was Simon Lewis and you can find his contact details here: https://www.brabners.com/people/simon-lewis
Stay safe & stay well
24/03/2020 – Temporarily Unoccupied Premises
Further to our update on the 20th March and the Government’s decision last night, we have now managed to agree cover with our insurers, Aviva, in respect of Temporarily Unoccupied premises. Unrestricted cover will apply to premises that have followed Government advice to close temporarily. This cover will stay in place for as long as the premise is closed up to 90 consecutive days.
We appreciate some of our clients are still operating to support Key Workers and others have decided to close their nurseries.
We would firstly like to advise you that there is no need to notify us that your premises have closed temporarily due to the Covid-19 outbreak.
If you have already closed your premises, we appreciate that you will not be able to visit the premises for at least the next 3 weeks.
If you about to close your premises, we would advise you of the following best practices to keep your nurseries protected during this difficult period:
- Heating left on but other critical services powered down if not required, unless to support protection or detection systems
- All external areas must be clear of waste and combustible materials
- Consider waste build-up and the controls needed if waste collection services are affected
- All fire protection, detection, and security systems to remain active and monitored remotely, where possible
- Secure and seal all letter boxes and openings and redirect post, if necessary
- Consideration should be given to accumulation of vehicles, proximity to buildings, and their security when premises are unattended
- Perimeter security, fences and lighting are in good condition and operational
- All physical security and locking devices are working and in place
- All protection and detection systems are operational
- There are no leaking fluids or spills
With more action from the government likely in relation to social distancing and potential for further “lockdown measures” we will continue to review the position, with the insurers. If you have any queries or concerns, please do not hesitate to contact us.
Whilst writing, we would remind you that although some premises are closed, insurance protection is still required in respect of possible fires, burst pipes, thefts, Property Owners Liability. If you are in financial difficulty, our finance provider, Close Brothers Premium Finance, will speak with you about potentially reducing payment for 2 months, moving the additional premium into months 11 and 12, rather than in the 10 months we usually charge in. This is considered on a case-by-case basis and you can call them directly on 0333 321 8566 quoting your loan reference number.
20/03/2020 – dot2dot & Covid-19
Due to the changes that are taking place today, we would firstly like to confirm that if you are staying open to care for key worker’s children, then our policy will continue to provide the relevant insurance.
If you do need to close your nursery following Government advice cover will continue to apply to your premises whilst unoccupied for a period of up to 45 consecutive days. If in the event the premises continue to be unoccupied past this period, it is important that you contact us. We are in dialogue with Aviva to agree how we will manage this situation should it occur.
Turning now to the wider issues, I’m truly sorry that at a time of such immense challenge for you, we cannot provide the answers you want to hear. The outbreak of Covid-19, coronavirus is uncharted territory.
We have always aimed to be a human face/voice of the nursery insurance. Which is why during the past few weeks, we have tried to speak to as many of you as we can to explain the situation in person and over the phone. At the last count, my team had spoken to over 600 nursery professionals. I took the decision to speak to you directly rather than send an email, as the situation has been changing at such a fast pace.
However, as the advice from the Government has moved far beyond what we all anticipated, now is the time to write to explain the current situation and reiterate what we have said verbally.
I wanted to reach out to you as a fellow business owner and be clear about your dot2dot insurance policy and the Covid-19 strain of coronavirus.
dot2dot is backed by Aviva and our policy wording is one of the strongest and most flexible in the sector. However, it does not and will not cover you for closure due to Covid-19.In the latest release from the Government titled Covid-19: support for business, they also offer guidance on Insurance it states “Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. Most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics”.
Why is it not covered by the Business Interruption Section of the policy?
The intention of the Business Interruption Insurance Section of the policy is to cover losses resulting from physical damage to insured property by an insured peril such as flood or fire. In respect of certain industries, such as food, care and leisure, policies are often extended to include interruption to the business due to ‘specified diseases’. The dot2dot policy falls into this category and provides cover for ‘specified diseases’ such as measles, meningitis, chickenpox and rubella.
The reason that policies will not respond to the outbreak of Covid-19 is because it is a new and unknown virus, and the exposure and risk cannot be quantified. Insurers including Aviva apply this restriction, as they have not studied and modelled potential claims for this new virus strain, as they have been able to for the other specified diseases mentioned. Insurers must be able to understand their potential financial exposure in order to meet their solvency and claim obligations to policyholders. We estimate that for each day that the 24,000 nurseries across the UK stay closed, it would cost the insurance sector as a whole, approximately £72 million per day.
There is an article within Nursery World which includes a good explanation as to why insurers cannot cover for coronavirus. I have copied an extract from it below.
‘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 Government is telling us to close, why are dot2dot not covering?
The Closure by Competent Authority extension in the dot2dot policy excludes “any action taken in controlling, preventing or suppressing the spread of any disease” (page 32 of your policy wording).
Having had many discussions and multiple meetings with Aviva, insurers are remaining strong on there being no protection. As stated in the figures above, we believe there is a real risk that insurers may fail, as the claims bill globally rises beyond anything ever seen before.
So, what options do nurseries have?
Over the last three weeks, we have been looking for ways that we can help and we have had detailed dialogue with Aviva, who have agreed that dot2dot nurseries can do the following (with appropriate risk assessments in place) and still be covered by their dot2dot policy.
- Care for children whilst running relaxed ratios. EYFS guidance allows for relaxed ratios in exceptional circumstances. The dot2dot policy does not have any conditions in relation to ratios, so you can make appropriate adjustments as long as you meet the needs of all children and ensure their safety.
- Take on older children. If you already operate an out of school club, we are happy for you to extend this to care for key worker children throughout the day. If you do not operate an out of school now, you will need to complete appropriate risk assessments for older children, but cover will be in place.
- Extend your hours, if you are caring for the children of key workers, you can extend your hours to care for children when care is needed, whether that is overnight or in line with key worker shift patterns. Please be aware you will need to comply with some additional conditions. We have agreed this cover being included subject to you complying with these additional points and you can find out more here https://bit.ly/d2dextend
- Offer care in the home. You can consider redistributing your staff as ‘nannies’. These staff can care for the children of two families in one family home. There are of course some strict guidelines on what you need to have in place to do this We have agreed this cover being included subject to you complying with these additional points and you can find out more here bit.ly/d2dhomecare
- Look at your contracts. If you have a lay-off clause in your staff contract you may want to consider invoking this, but we advise to speak to an employment law specialist first. You can speak to BrightHR on 0844 800 7061 or our strategic partners Stephenson’s may be able to help.
- Following guidance from HR Advisors you have most likely started communications with your staff now to try to reduce the stress and worry. If you are concerned about how long you can pay wages for, speak to staff now and explain the situation. If you can pay full wages for 2 weeks but after that, it will have to reduce, be as open and honest as you can. That way staff can budget themselves and will appreciate you being candid. Whilst the nursery is closed, stay in contact with your team, set up a nursery WhatsApp group and send a message as often as you can to keep staff up to date and in the loop.
- If you are in financial difficulty and pay your insurance in instalments, our finance provider, Close Brothers Premium Finance, will speak with you about potentially reducing payment for 2 months, moving the additional premium into months 11 and 12, rather than in the 10 months we usually charge in. This is considered on a case-by-case basis and you can call them directly on 0333 321 8566 quoting your loan reference number.
I am truly sorry that at this time, I cannot provide a complete solution for you all, but rest assured that my team and I are trying our best to support you in any way we can. From one business owner to another, I wish you well in this challenging time and please stay safe.