© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
© 2025 News On The Block. All rights reserved.
News on the Block is a trading name of Premier Property Media Ltd.
Insuring blocks of flats
It might seem that one block of flats is just like any other so you might assume the cheapest policy will give the same cover as any other. But the scope of cover available can vary considerably from one policy to another and thus the cost will be higher.
The basic rule is that cheaper policies tend to provide less comprehensive cover; unless, of course, you have consulted a specialist in the area of blocks of flats insurance.
Getting it wrong can be a problem, because there will be a range of people who are interested (financially) in the decision, including individual residents, the freeholder, leaseholders and, in many cases, mortgage lenders.
What should you expect from the insurance policy?
A good block of flats policy will cover the full range of risks, including accidental damage, not just for the fabric of the building but also landlords’ fixtures and fittings. The policy should also cover (in addition to the basic sum insured) architects’ and consulting engineers’ fees, loss of rent and/or the cost of alternative accommodation. There should also be cover to allow for the replacement of locks and keys as well as safety equipment. Your broker should also be specialised enough to provide advice on risk management issues; after all, preventing a loss is far better than picking up the pieces afterwards.
In addition, cover should also include damage to landlords’ contents and liability to third parties and employees (unless separate insurance is held for the latter).
A case in point: George Williamson was responsible for insuring all the blocks of flats owned by his client and managed by his company. To date the company owns three blocks with a combined value of £5 million. A month ago, it purchased an additional block worth £1.5 million, but he forgot to tell the insurance company. Unfortunately, there was a‚ major fire at the new premises a few days ago and he didn’t know what to tell the directors.
Fortunately, the insurance broker told George the policy he’d arranged automatically provided cover of up to £2 million for 90 days from the completion date, so George was able to report that all was well. The broker also pointed out that capital extensions would also be automatically covered during the same period for up to 10% of the sum insured or £500,000, whichever is lower. But George decided to ensure that all future changes are notified in advance, to be sure!
Provisions for covering extra properties and additions to existing ones will vary between insurers and possibly within different policies issued by the same insurer. This is only an example.