As nursery owners and managers you will be acutely aware of the responsibility and duty of care owed towards the parents of children in your care. This duty of care also extends to make you liable for the acts of your employees.

The recent high level media coverage of alleged child abuse incidents committed by employees has naturally raised concerns with nursery owners and managers. We thought that it would be valuable to outline the insurance implications of abuse occurring in the setting to support owners and managers in understanding how the subject of abuse is dealt with from an insurance perspective.

Abuse – legal definition?
There is no legal definition of abuse. However, in the context of legal liability and insurance, it may be encapsulated as:-

• A situation where there is a duty of care owed to a vulnerable person – vulnerable due to age and/or disability; and

• There is a breach of that duty by: -

  • The sexualisation of the victim and/or use of the victim for non consensual sexual gratification;

  • An excessively harsh regime or systematic maltreatment, neglect or assault.

Vicarious Liability – recent developments in case law
In 2002 the House of Lord’s made the landmark decision in Lister v Hesley Hall Ltd that an employer was vicariously liable for the abusive acts of an employee. In this case it was held that there was sufficient connection between the employee’s work and the abuse for it to have been committed in the course of employment.

Public Liability insurance cover
As outlined above as owner or manager of your nursery you could be held vicariously liable for the actions of your abusive employee. It is therefore vital that you have a clear understanding as to whether your Public Liability insurance extends to cover acts of abuse committed by your employees.

Where the policy is written on the traditional basis of ‘legal liability for accidental bodily injury’ there is no need to refer specifically to injury arising from abuse. Insurers will be covering the act of abuse within the definition of bodily injury.

If a parent brings an action for abuse-related injury (physical or psychiatric) an insurance cover written on the above basis should provide an indemnity if: -

• There is a legal liability;

• The event is accidental and not a deliberate act by the Insured in person (even though it may be a deliberate act by an employee or volunteer for which the Insured is vicariously liable).

In recent years some insurers have taken the decision to exclude abuse from their Public Liability insurance cover. These insurers have then usually offered customers the option to ‘buy back’ abuse cover through payment of an additional premium. If your insurer has a wording that contains an exclusion for acts of abuse then you should:-

• check to ensure that you have purchased the abuse cover extension (if it is available from your insurer);

• If you haven’t purchased the extension, contact your insurer to discuss adding it to your policy;

• If your insurer does not offer the extension, consider switching to an insurer that offers cover on a traditional basis or that does provide an extension for payment of an additional premium.

Preventative measures – your safeguarding policy
Knowing that you have insurance protection against acts of abuse committed by your employees will provide you with piece of mind. However, prevention should obviously be your first priority. It is therefore vitally important to have in place policies and procedures to minimise the opportunities for abuse to happen in the first place.

The risk of abuse can never be totally eliminated and therefore your procedures need to be able to recognise, as early as possible, if there has been a failure and abuse has occurred. Early recognition can help to significantly minimise the injury to the victim.

Your policies and procedures should be contained in a written safeguarding policy. Important features of a safeguarding policy are: -

• Its provisions are embedded in the culture and day to day operation of the organisation at all levels with relevant formal training and refresher courses held at least annually;

• That there is an ongoing review of the policy conducted at least annually so as to maintain current best practice and observe any changes in legislation;

• That there is secure, long-term retention of all personnel, employment and training records, inspection reports, liability insurance records and other incident related correspondence.

Del Sharman
Underwriting Manager
Pound Gates & Co Ltd

For further guidance please contact Del Sharman on 01473 346030 or by email at del.sharman@poundgates.com