Block in a Box provides a range of services and solutions for those that self-manage their blocks of flats.
Taking on the responsibility of organising the insurance for your block can be understandably daunting, so the team at Block in a Box have teamed up with Flat Living Insurance to make sure you’re covered.
Before you find yourself needing to make a claim, have a read of our essential cover guide below.
Residential Buildings Insurance
This is the big one- most likely first on your list and certainly top priority for your fellow residents. While the cover should be comprehensive and suited to the needs of your block, the price also has to be right and finding a balance can be challenging.
- Step one should be to ensure that your Buildings Sum Insured is up to date and accurate.
Tip: This is not the same as the price paid for the property or a current market valuation.
Your Buildings Sum Insured is the maximum amount of money your insurer will be willing to pay out to rebuild your property from the ground up (to its current design and to current specs) should the very worst happen. This valuation includes demolishing and clearing away any remaining structures before rebuilding with modern materials and professional labour.
The cost of materials and labour continue to rise despite any setbacks the property market may be experiencing so it’s never safe to assume that if the market is slow, your reinstatement costs will be lower.
Your property should be re-valued at least every 5 years by a Chartered Valuation Surveyor. They will take into account any improvements made to the property since the last valuation as well as the current costs involved in reinstatement.
Tip: Many people assume that is the cost of repairing their property falls below the sum insured that the full amount needed will be automatically paid. This is not the case. Pay-outs are based on the level of cover being sufficient to reinstate the whole property.
Residents’ Management Company (RMC) directors should always check that the description of the property insured is accurate and includes cover for the outbuildings, gates, fences, underground pipes and cables that the RMC is responsible for insuring.
Also, most policies are index-linked to ensure the sums insured remain adequate – do confirm with your insurer that this is the case.
- Step two is also of utmost importance – check your potential policy wording!
Not all policies are the same, and the company offering the cheapest deal may not be offering the same level of cover as a slightly more expensive option. That could mean the difference between your leaseholders being out of pocket in the worst-case scenario or being properly covered- the latter definitely makes the higher premium justifiable.
So, before you commit to a policy, check that it includes the following:
- “All Risks” cover (including subsidence)
- Employers Liability Insurance
- Public and Property Owners Liability cover
- Lessees’ fixtures and improvements
- Alternative Accommodation or Loss of Rent
- Loss or unauthorised use of Metered Utilities (Water)
- Cost of tracing leakage of oil or water
- Loss of or Damage to contents in communal areas
- Damage to underground Pipes and Cables
- Unrestricted cover on vacant or rented flats or apartments
- Machinery break down
- Damage to fixed glass, shower trays and sanitary fittings
- Storm damage to fences and gates
- Legal expenses
- Replacement of communal door locks following theft of keys
- Personal accident cover for voluntary workers
- Fidelity guarantee
Tip: Most residential buildings insurance policies have a minimum of £1,000 subsidence excess, however, the excess for all other damage is usually negotiable.
Head to our website for an outline of our buildings insurance offering, specifically designed for blocks of flats.
In addition to your buildings insurance, there are some specialist areas of cover that RMC’s should also be aware of:
Directors and Officers
RMC Directors and/or Officers can be held personally liable for their actions while working on behalf of leaseholders. While this may seem unfair when most directors are handling things on behalf of their fellow leaseholders out of a desire to help, sometimes things can go sour- especially if finances are impacted due to RMC decisions.
Taking out Directors and Officers Liability insurance provides cover for defence costs and/or compensation for civil liability charges relating to a “wrongful act” in connection with RMC matters.
Such acts are defined as any actual or alleged:
- Breach of trust
- Breach of warranty
- Misleading statement
Tip: Different policies may contain different definitions so do read the small print.
There will also be Limitations and Exclusions to this type of cover- for example:
- Dishonesty, Fraud, Malicious Conduct or Personal Profit
- Bodily injury (other than defence costs)
- Property damage
- Fines, penalties and damages
Here’s a brief outline of an example claim:
Leaseholders of a block of flats successfully brought an action against the residents committee for failing to appoint a building company in a timely fashion to repair external brickwork on the building.
Damage had been caused following a heavy rainstorm and reported to the committee, however repair work had not commenced several months later, when a subsequent rainstorm caused further damage.
This is the kind of situation that could have been successfully “managed” had the committee in question put an appropriate insurance policy in place. You can find out about our Directors and Officers cover here.
Got a Lift?
You’ll need Engineering Insurance and Inspection cover then.
While most blocks’ buildings insurance policies will cover damage to passenger lifts as a result of an insured peril (such as fire, accidental damage and malicious damage), these policies do not normally extend to damage caused by the breakdown of the passenger lift or to the legal requirement to have lifts regularly inspected.
Enter the specialist Engineering Policy, which many of the specialist insurers offer.
These policies are designed to help property owners comply with their legal obligation to have their lift inspected by a competent authority at six-monthly intervals. A record of these inspections must be kept and/or a certificate issued.
You can find more details re the cover Flat Living Insurance can provide here.
Terrorism: Could Your Building be a Target?
Unfortunately, this is something all RMC directors must consider.
Even in the quietest, most rural areas, terrorism is a real threat and, during the untold stress of being involved in an incident, the last thing your leaseholders will need is to be told that their insurance doesn’t stretch to this sort of situation.
It’s tempting to skip this policy to save a little on your premiums- we understand that. But at the same time, ignoring the potential for your building to be affected could cost your leaseholders their homes.
The threat could be indirect; individual residents could be threatened if, for example, they are employed by a laboratory that uses animals for medical testing purposes. Or the threat could be right next door – no leaseholder will advertise the fact that they’re building a bomb in their living room after all.
A standard buildings insurance policy will not provide cover for a terrorist attack and, however unlikely it may appear, if an incident did occur and there was no insurance in place, the RMC directors could be held responsible.
Tip: Don’t forget that directors have personal responsibility for their decisions and actions within the Residents Management Company. Taking out the appropriate cover is a small price to pay in comparison to risking your personal assets.
Be careful not to leave yourself or your residents high and dry. Working with Flat Living Insurance to ensure your building is covered in every way it should be takes the hassle out of this huge responsibility and will help you avoid any potential pitfalls further down the line.
Head to the Flat Living Insurance website for details of the policies covered above as well as other products such as Cyber Liability Insurance, Out of Hours Assistance, Roads and Private Estates policies and more. You can also find details of the services we provide such as Manage Your Block and more about Block in a Box– tools specifically designed to make the lives of RMC directors simpler and easier.