The collapse of three schools under the Galaxy Global Education Group (GGEG) this summer has thrown a spotlight on an insurance challenge that many in the market have been slow to confront: the risk does not stop when a school closes its doors.
Ruthin School in North Wales entered financial administration at the end of the summer term 2026, having ceased operations alongside Durham High School in County Durham and Malvern St James in Worcestershire. All three operated under GGEG, the China-founded education group led by philanthropist Shangmei Gao. Around 240 pupils were enrolled at Ruthin alone, with more than 100 staff losing their jobs, while Durham High School had 281 pupils affected. Plymouth College in Devon remains the group's only operational UK school.
The closures have raised urgent questions for insurance professionals active in the independent school sector, not just about the schools themselves, but about the liabilities that continue long after education has ceased.
Laura Carter, customer segment director at Ecclesiastical Insurance, said the scale of the Galaxy Global situation highlights a misconception that persists across the sector.
"One of the biggest misconceptions is that a school's insurance needs end when the gates close," Carter said. "In reality, the risk often changes rather than disappears. Buildings and assets may still need protection, particularly if premises become vacant, while liability exposures can continue long after a school has ceased operating."
Vacant school buildings present particular challenges for insurers. Properties that are no longer actively managed face heightened risks of fire, vandalism and third-party liability, requiring cover that differs from a standard operational policy. Where a school enters administration, responsibility for maintaining that protection may fall to administrators, trustees or governors, adding further complexity during an already difficult period.
Directors' and officers' (D&O) liability is another area requiring close attention. Parents at several Galaxy Global schools reported that monthly fees were collected just hours before closure was announced in July 2026, with no advance warning. Governors, who act as company directors under UK law, may face scrutiny over decisions taken in the lead-up to closure, a risk D&O insurers will be watching closely.
For brokers advising schools experiencing financial distress, Carter said early engagement is essential.
"Early engagement between schools, brokers and insurers is so important when financial difficulties emerge," she said. "Having the right conversations early can help ensure appropriate cover remains in place while the future of the school, its assets and any ongoing liabilities is determined."
The Galaxy Global closures are far from an isolated case. Since the UK government introduced 20% value added tax (VAT) on independent school fees on 1 January 2025, the number of closures and pupil departures has consistently exceeded official forecasts.
According to the House of Commons Library, the government originally estimated that around 37,000 pupils, roughly 6% of the independent school population, would leave the sector. Analysis of official data published in June 2026 suggests more than 43,000 pupils have already left mainstream independent schools since the policy took effect. In January 2026, Julie Robinson, chief executive of the Independent Schools Council (ISC), said 105 institutions had ceased operations since the VAT policy was introduced, describing the measure as "a bridge too far" for many schools already operating on tight margins.
GGEG has cited the removal of charitable status, the VAT change, rising employment costs and the withdrawal of business rates relief as contributing factors to its UK school closures.
The group's difficulties also reflect a broader trend in overseas ownership. According to intelligence analysts Venture Education, more than 30 independent schools were acquired by Chinese investors between 2014 and 2024. Several other China-linked schools have also announced closures in recent months, including St Michael Abbey in Tenbury Wells and Thetford Grammar in Norfolk.
For insurers and brokers specialising in education risks, the question is whether appetite for this segment may need to be reassessed.
For intermediaries with independent school clients, particularly those facing financial strain, the Galaxy Global situation is a timely reminder to review cover across several areas, including property and vacancy risks, run-off liability, governors' liability and fee protection insurance for parents who have prepaid school fees.
Ecclesiastical, which underwrites schools across the UK, said it continues to assess risks on their individual merits rather than taking a sector-wide approach.
"From an underwriting perspective there is no one-size-fits-all approach," Carter said. "We continue to assess schools on their individual circumstances, including financial resilience, governance, estate management and overall risk profile."
Those operating in the Lloyd's and wider London market will also be watching the administration process at Ruthin closely. Educational institutions can generate significant long-tail liabilities, particularly where historic safeguarding allegations or personal injury claims remain unresolved when a school closes.
For the insurance market, the summer of 2026 could mark an important turning point. A sustained wave of independent school closures is creating exposures that extend well beyond the classroom, reinforcing the need for early engagement, careful underwriting and a clear understanding of the liabilities that remain long after the gates have closed.
