Our bespoke buildings insurance policy provides comprehensive cover for purpose built blocks or houses converted into flats / apartments.
Further details of our blocks of flats / apartments policy cover
Our buildings policy is designed to suit the needs of a freeholder, residents association, management company or RTM company in arranging a block insurance policy for purpose build blocks of flats or houses converted into flats / apartments.
Providing bespoke cover for flats and apartments our policy automatically includes:
- Buildings cover on an all risks basis including subsidence and index linking
- Communal contents up to £25,000
- Loss of rent / alternative accommodation up to 33% of buildings sum insured
- Property owners liability of £5,000,000
- Employers Liability of £10,000,000
- Trace & access of leaks £50,000
- Loss of metered supplies £25,000
- Damage to gardens by emergency services £25,000
- Landlords gardening equipment £10,000
- Replacement locks following theft of keys £2,500
- Reasonable costs for felling or lopping of dangerous trees £2,500
- Removal of Bees and/or wasps nests £5,000
- Removal of fly tipping £2,500
- Reinstatement costs of complying with EU and Public Authorities
- Damage to underground services
- Breakage of fixed glass & sanitary fixtures
And to protect the interests of the policyholder / flat owners our policy automatically includes:
- A non invalidation clause to prevent the policy being invalidated by events unknown by or outside the control of the policyholder.
- Automatic extension for repairs / contract works up to £50,000
- Automatic inclusion of interested parties
- Automatic extension to the Public liability section to protect management companies, residents associations, RTM companies and lessees.
- Automatic extension to extent loss of rent cover to private lessees who rent their flats.
- Automatic transfer of interest extension to cover sale of flats
- Automatic compliance with the mortgage lenders handbook
Who should insure and why?
The responsibility for insuring the buildings of a block of flats / apartments is normally defined by the lease and expressed under the freeholder’s covenants, with a right to recover the cost of such under the service charge provisions. Ultimately failure to do so would be a breach of the lease, leaving the freeholder contractually liable (unless the right to insure has been formally assigned to a management company, residents’ association or RTM company etc).
There are a number of reasons why it is appropriate for the buildings policy to be arranged for the entire block. If each flat owner insured the buildings of their flat individually then dealing with a claim would become complex as multiple insurers would be involved and, in the event that one flat had failed to arrange cover, then the matter would be further complicated. In addition, there would be differences in cover between the policies and a number of serious omissions in cover may transpire. As such, the best solution is a policy specifically designed to meet the needs of insuring a block of flats / apartments which includes all the unique covers required to protect all of the parties involved.
The buildings policy extends to provide contents cover in respect of communal areas and landlords’ gardening equipment owned by, or the responsibility of, the policyholder. So, for example, the contents of common parts would not cover a push bike or pram left in the stairwell by an occupier. Contents insurance of individual flats, however, remains the responsibility of the individual lessee / owner / occupier.
Public / Property Owners & Employers Liability explained
We automatically include cover for Public / Property Owners Liability with an indemnity limit of £5 Million (reduced to £2 million in respect of terrorism, unless the additional terrorism insurance extension has been selected). Cover automatically extends to include all the parties that may need to be indemnified, including Freeholders, Management Companies, Residents Associations, Managing Agents, RTM Companies and Lessees.
We also automatically include Employers Liability with an indemnity limit of £10 million (reduced to £5 million in respect of terrorism, unless the additional terrorism insurance extension has been selected). We consider this to be an important extension as, while you may not consider that you directly employ any staff, it is easy to fall foul of employment legislation and for a gardener, maintenance worker or cleaner of the communal parts to be deemed an employee. For this reason we automatically include this cover on a contingent basis.
Please note that lessees who let their flats would also need to consider landlords’ liability and this needs to be purchased separately.
Terrorism Insurance Extension explained
Whilst this extension comes at a cost, it is intended to protect freeholders from their obligations under the lease. If your lease states that you should insure against all normally available insurance perils or provide comprehensive insurance then, by not purchasing this extension of cover, you may be failing to meet the requirements of the lease.
Since January 2003 terrorism insurance has been offered on an all risks basis, including damage caused by nuclear, biological and radiological means. This cover is designed to reflect the perceived danger of contamination caused by terrorist activities, i.e. the fall-out from a so called "dirty bomb", and is provided by Pool Re, a specifically chosen government backed insurer.
Indemnity is provided up to the sum insured on the buildings policy plus the cover for loss of rent / alternative accommodation. However, we can only provide the Terrorism Insurance extension where we arrange the main buildings policy. If this extension is not selected, then the buildings policy would provide no cover for damage caused by terrorist activity; other than the reduced limits for Public / Property Owners and Employers Liability.
Legal Expenses explained
This fairly inexpensive extension provides protection for legal costs and expenses arising in connection with the ownership and leasing of residential property, with a limit of indemnity available from £50,000 to £500,000. We recommend a minimum indemnity of £100,000, increasing for larger blocks.
Legal Expenses cover includes:
Property Protection - cover to pursue a civil action following events which cause or could cause damage to your property, a nuisance or trespass where the amount in dispute exceeds £1,000
Legal Defence for criminal action or civil actions which are taken against you for any non-motor related incidents arising in connection with the business. This includes cover for prosecution under Health and Safety or Data Protection legislation
Contract Disputes - cover is provided to negotiate disputes relating to a contract you have entered into with a customer or supplier for the purchase or sale of goods or services where the amount in dispute exceeds £250
Debt Recovery - cover for your legal rights to recover money and interest due from the sale or provision of goods or services where the amount in dispute exceeds £100
Full or Aspect Enquiries - cover for appeal proceedings in respect of a Full Enquiry and/or Aspect Enquiry carried out by HM Revenue and Customs
Cover starts at only £63 for blocks of less than 25 flats.
Please note that in order to protect the management company, residents association or RTM company they should be noted as the policyholder or joint insured.
Directors and Officers Liability
This valuable cover protects the directors and officers of a management company, residents’ association or RTM company against wrongful acts, errors or omissions in the running of the management of the block of flats for which they are personally liable.
Cover includes loss and defence costs for the insured person in defending an action brought against them, with limits of indemnity ranging from £100,000 to £1,000,000. We recommend a minimum limit of indemnity of £250,000, increasing for larger blocks.
Cover can be extended to include the "entity" (management company, residents’ association or RTM company), providing the company with reimbursements for any loss and defence costs which result from a claim for a director's or officer's wrongful acts, errors or omissions.
Directors should be aware that they can be held personally liable for their acts, errors or omissions and that the law does not distinguish between the director of a management company, residents’ association or RTM company and that of a major corporation. Surprisingly few directors protect themselves with a Directors and Officers policy, something that is best described as a "Should Have Cover".
Engineering (Lifts & Boilers Insurance & Inspection)
Lifts and communal boilers in a block of flats / apartments are required, by law, to be subject to periodic statutory inspections. In the case of passenger lifts this is twice a year and in respect of communal boilers once a year.
We can provide this service as an extension to our policy and, in addition to the statutory inspection, we also provide insurance cover for sudden and unforeseen damage. You would still need a maintenance contract for your lifts / boilers and the insurance cover does not include routine maintenance or wear and tear.
The statutory inspection can be arranged by your maintenance company but they are not normally able to offer insurance cover. Most blocks of flats / apartments, therefore, arrange this through their insurance company or insurance advisor. However, we can only provide the insurance cover for sudden and unforeseen damage where we also arrange the statutory inspection.
As part of the statutory inspection service a site log would be kept at a pre-agreed location (normally the plant room or the top of a lift shaft) and you would be issued with reports after each inspection. These would identify any immediate actions required to maintain safety, items that would need to be considered by the maintenance company in their routine servicing as well as any long term / non-urgent recommendations.
You should also note that communal boilers and boilers in rented flats are also required to have a gas certificate issued annually. This would need to be arranged by a certified "gas safe" gas engineer. The gas safe website at www.gassaferegister.co.uk would provide you with details of qualified engineers in your area
Flats which are owner occupied are not currently normally required to have gas certificate issued annually, albeit they will need to carry a current certificate in order to sell the flat. Some management companies however arrange gas certification on all the flats in a block which is considered to be a good safety measure.
We can advise on all aspects of insurance for blocks of flats and apartments including suitability of cover, calculating the sums insured, the provision of extensions such as terrorism insurance, legal expenses, directors and officers and inspection of lifts and communal boilers. Currently our parent company insures 4% of the blocks of flats buildings in the UK, making us one of the country's largest providers of buildings insurance for flats.