United Kingdom

Under the microscope: Education professional indemnity cover and claims notification

Complaints from students continue to rise in the higher education sector. Matt James, client director – head of education at Aon, explains when, and why, you should notify your professional indemnity insurer of potential claims under your policy.

Disruption caused by the pandemic has driven an increase in student complaints in the last couple of years. Given this, knowing when to notify your professional indemnity (PI) insurer about a complaint is essential.

Complaints within the higher education sector have risen steadily since 2017, with figures from the Office of the Independent Adjudicator (OIA)(1) showing that it received 2,763 complaints in 2021 from students in England and Wales. This represents an increase of 6% on 2020’s figures, and a significant leap from the 1,517 it received five years ago.


Increased compensation

Compensation has also increased substantially. The OIA’s figures show that its recommendations in 2021 included financial compensation of £792,504. Added to the £511,875 paid in settlements, this puts the total compensation at £1.3m – up significantly from the £742,132 paid out the previous year.

Disruption caused by the pandemic has fuelled some of the increase, with 37% of complaints relating to this – up from 12% in 2020. And, although more normality is returning this year, there is still the potential for more pandemic-related complaints to filter through. Complaints procedures mean it takes time before a case is referred to the OIA plus, there are still students who experienced disruption during the pandemic who will graduate over the next few years.


Insurance support

Where a complaint is received, it’s important that the institution and relevant departments know when to let your PI insurer and broker know. Not every complaint will become a claim, and many can be resolved by university staff, but where there is the potential for it to become a claim, your insurer and broker can provide valuable advice and support.

It also means you meet the terms of your insurance. Notifying your insurer about a potential claim triggers the policy and avoids any issues around late notification. Telling them as soon as possible also ensures the university is properly protected. For potential future claims, your insurer will want to provide advice to help mitigate any loss and avoid prejudicing their position if they are required to formally become involved and defend the institution later down the line.


Notification points

Complaints can vary enormously, from ones that are simple to resolve internally to those that have the potential to result in financial compensation. These are some of the key instances when you should notify your insurer about a complaint:

  • A complaint, either directly to the institution or to the OIA, that requests or indicates they are seeking compensation.
  • A letter from a solicitor acting on behalf of a student.
  • An allegation of discrimination.
  • An issue around withholding of a certificate of a fitness to practice (typically applicable to courses that relate to health, social work or education).
  • A threat of judicial review.

These are the key notification triggers but as there is no definitive list – and it can vary between insurers – it is always best to let your insurer or broker know if you are concerned that a complaint has the potential to become a claim. Insurers would rather provide guidance at this early stage, even if it is to simply note that it could be a future claim, than find out about it later when there may be less room for mitigation.


Renewal of your PI insurance

PI insurance is underwritten on a “claims made” basis, meaning that it is the insurer on cover at the time the claim is made, who will need to defend the institution and potentially meet compensation costs. Because there are strict reporting requirements on claims made policies at renewal, we would encourage an open discussion with your insurer and broker as you approach renewal, to notify the insurer in the existing policy year, of any potential claims or threats of claims, even if they have not been formally presented to the university. This open dialogue will seek to mitigate any potential non-disclosure challenges if a claim is later made for something that the university was aware could have become a claim before renewal.

We recognise that it can be a challenge to determine when a complaint becomes a claim, and when you should notify. Many insurers in the PI sector are happy to attend a brief meeting in order to discuss their individual reporting requirements and ensure that you as the policyholder, are notifying them of the right matters, at the right time.


More information

At Aon, we have many years’ experience in the higher education sector and can advise you on your insurance requirements, including when to notify your PI insurer of a complaint. To find out more about how we can help you and your organisation, speak to your Aon account manager or contact Matt James at [email protected].

(1) OIA Annual Report 2021 (oiahe.org.uk)