Business Continuity – Is Your Plan Fit for Purpose?

Introduction

The content of a school’s risk register changes constantly as risks evolve.  The last few years has seen the potential impact of a cyber-attack become more prominent in many risk registers, with additional internal resources and attention paid to this risk.  But what if the school suffered a serious fire, or a flood, how would the school respond, when was your continuity plan last reviewed and tested?   The likelihood of a serious loss from ‘traditional’ insurance causes is diminishing because of increased property protections and general awareness, however their impact when occurs can be catastrophic without a robust plan to respond. 

Is Your Plan Fit for Purpose?

A relevant business continuity plan is a living document which is reviewed at least annually and tested periodically; can you say your school has an active continuity plan, or is it more of an IT disaster recovery plan, critical response, or crisis management plan?  These will assist with the initial couple of weeks after a serious disruption, and remote learning will provide a buffer with parents, but then what?   You may rely upon the business interruption section of your insurance, but when discussing this with your broker, do you know whether the cover in force will meet your needs?

Considerations for a Business Continuity Plan

The approach to developing a plan can be as simple or as complex as you require.  Bursars often know the school best (the positives and the challenges), but ask these questions; have colleagues had input into the risks and response, do colleagues know what to do when an incident occurs, have third party companies had input into your response, do staff know who to contact, how has the plan been communicated, and how is it accessed?

The school should consider how a serious event would impact the delivery of your services.  Parents will be sympathetic, as they will have chosen your school for their child for a variety of reasons, but they are paying for services promised and will expect the impact on their child’s education and extracurricular activities to be limited.

Themes to include in the continuity plan could include; how are the buildings spread and what are they used for (is there capacity in some buildings to deliver the services of others) and how much land is readily accessible to put modular structures on or should you consider other locations, perhaps reciprocal agreements with other schools.  Who would deliver the temporary structures and how would they link into the mains services and are there any issues with accessing the location?  Consider having a site survey undertaken by suppliers of these structures; they could assess potential problems in advance.  This will also assist with assessing budgets for these situations and drive conversations with your insurers. 

When considering fire risks, do you know when the fire brigade last visited the school and do they have plans of your premises?  If not, do you have the plans accessible at the entrance to key buildings.  You should also consider whether the water supply on site or nearby could assist the fire brigade.  Are there nearby streams or rivers or swimming pools on site or fire hydrants which could be called upon (which have been tested)?  

The above represents generic thought processes, but additional ideas will come from key staff, which should be used to enhance the initial critical response plan.  There are specific templates available which provide the necessary thought path and flow charts for the school to tailor to your own requirements.  You can ask risk management companies to design, implement and test a plan, but this would usually come at a cost.  

Whilst there are currently no prescriptive insurance conditions as to what your plan should entail, your insurer will expect a continuity plan to be in place and they can provide guidance as to how robust it may be at present as well as outline considerations for improvement.  It is in all parties’ interest to have a continuity plan which is kept up to date.  If the plan is deficient, you could lose more downtime, lose pupils to rival schools, lose more income or incur additional costs than otherwise would, which feeds into a larger claim. 

Considerations for Period of Insurance Cover

As well as a continuity plan, you should consider the school’s insurance protection.  The business interruption section of a policy should respond to the worst-case scenario (where insured) considering the use and spread of your school’s buildings, as well as the impact on delivering your services and impact on your reputation. 

Attention should be given to the length of time the business interruption section covers.  In determining what is a sensible timeframe for your school, key considerations could involve understanding how long it would take to; demolish the damaged buildings and clear the site, navigating the planning consents for the rebuild (especially if listed status is involved), the tender process for procurement of contractors, then the actual rebuild itself.  These themes apply to both the damaged buildings and some aspects to temporary accommodation (modulars) which may be hired.  There could be planning problems with hired premises, depending upon the school site, and it is always best to know in advance and ensure the necessary consents are in place.  Supply constraints are acute in the construction sector and the indemnity period in policies starts from the date of incident.  If your policy has less than a 36-month period, you should be checking whether this is adequate.

Considerations for the insurance cover provided

Business interruption can cover loss of Income (fees or commercial trading), increased cost of working, additional increased cost of working, alternative accommodation, flexible limit of loss, first loss.  Working in the insurance industry, we are familiar with these covers and phrases, but your school may not be.  If any of these are unfamiliar to your school, get advice to ensure you have the cover you think you do, or should have.  It’s better to ask now, rather than when a claim occurs.

The business interruption section of an insurance policy is complex.  As noted, there are different ways of insuring against various losses, and all policies have slightly different definitions sitting behind generic covers.  If these are not understood, you may be unpleasantly surprised by the amount the insurer offers you.

Expect insurers to appoint forensic accountants to assess the financial performance of the school and to investigate whether the costs associated with that new temporary science building or catering block, are reasonable or meet the policy threshold of being economic.

However you approach your plan, invest the time to review and update it and pull it away from the to-do list.

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