Block of flats insurance for landlords

If you own a block of flats and rent them out to tenants, you may need a special type of insurance to protect your property and your liability. This is called block of flats insurance – sometimes referred to as ‘block insurance’ – and it is designed to cover the specific risks and challenges that landlords of multi-unit buildings face.

What is block of flats insurance?

Block insurance is a form of property insurance that covers the entire building and its common areas, such as hallways, staircases, lifts, gardens and car parks. It is different from individual flats insurance, which only covers the contents and fixtures of a single flat.

Blocks of flats range from a converted terrace with an upstairs and downstairs flat; through to high-rise blocks of flats with dozens of flats.

Residents Management Companies can take on the insurance requirements but usually, it remains the freeholder who will arrange and supply insurance. This is currently undergoing legal change in the wake of the Grenfell tragedy; allowing residents and leaseholders much more influence on the insurance and to be named as interested parties. The idea is to stop exorbitant insurance costs from being charged/profiteering – where the freeholder or management company adds enormous fees for doing very little or the broker earns unreasonable sums in commission.

Block insurance usually includes liability insurance, which protects against compensation claims should someone be injured, or their property is damaged on the premises. This can be useful if you are sued by a tenant, a visitor, a contractor, or a member of the public.

Why do landlords need block of flats insurance?

As a landlord (management company or leaseholder), you are responsible for insuring the buildings and the common areas of your block of flats.

This is because you have a duty of care to your tenants/residents and anyone else who enters your property. If something goes wrong, such as a fire, a flood, a burglary, or should someone slip and falls, you could be held liable for the damages and losses.

Without block insurance, you would have to pay for the repairs and replacements out of your own pocket, which could be very expensive.

You could also face legal action and hefty fines if you are found to be negligent or in breach of regulations. Public liability insurance may help you here. Management Companies can also buy Director and Officers insurance to assist here as well.

Block of flats insurance can help you avoid these risks and costs by providing financial protection and peace of mind.

It can also help you comply with the terms and conditions of your mortgage lender, if you have one, and your leaseholders, if you are part of a management company.

What does block insurance cover?

Block insurance can cover a range of perils and events that could damage your property or cause injury to someone. Some of the common coverages include:

• Buildings insurance cover: This covers the structure and fabric of your block, such as the walls, windows, roof, doors, pipes, wires and fittings. It can pay for the repair or rebuild costs if your property/any of the flats is damaged by fire, storm, flood, subsidence, vandalism, or other insured events.
• Liability insurance: This covers your legal liability as a property owner and a landlord. It protects against compensation claims if you are sued by someone who is injured or whose property is damaged on your premises. There are two types of liability insurance: public liability and employer’s liability. Public liability covers claims from third parties, such as tenants, visitors, or passers-by. Employer’s liability covers claims from your employees, such as cleaners, gardeners, or maintenance workers.
• Loss of rent / alternative accommodation: This covers the loss of rental income if your block of flats becomes uninhabitable because of an insured event, such as flood, fire or storm. It can pay for the rent that you would have received from your tenants until your property is restored or re-let. Alternatively, your policy will provide alternative accommodation; thereby housing your tenants whilst the property is reinstated. You do not get both benefits; it is one or the other. This is not rent guarantee insurance either – that is a product to protect against tenants’ missing payments, nothing to do with the building or contents insurance.
• Accidental damage: This covers accidental and unexpected damage to your block or its contents, such as a broken window, a burst pipe, or a damaged carpet. It can pay for the repair or replacement costs if the damage is not caused by wear and tear, negligence, or deliberate acts.
• Contents insurance: This covers the contents and belongings that you own and provide for your tenants, such as furniture, appliances, carpets, curtains and artwork. It can pay for the repair or replacement costs if your contents are damaged, destroyed, or stolen by an insured event.
• Legal assistance: This is cover stitched into many blocks of flats insurance to assist with any legal disputes, regardless of the size of the block. Normally it’s better to buy as a block to save on cost.
• Terrorism Insurance. This is normally associated with blocks of flats. With terrorism excluded from many policies, for an extra charge, it can be covered on blocks.
• Director and Officers insurance. This is put in place to personally protect the directors of management companies who operate the insurance or management of the building.

How much does block insurance cost?

The cost of block insurance depends on various factors, such as:

• The size, type, and location of your block
• The number, value, and condition of your flats
• The age, construction, and security of your building
• The occupancy, tenancy, and rental income of your flats
• The level, type, and excess of your cover
• Your claims history and risk profile.

To get an accurate quote for your block of flats insurance, you need to provide these details to your insurer or broker. You can also compare quotes from different providers to find the best deal for your needs and budget.

How to find the best block insurance for landlords?

Finding the best block insurance for landlords can be challenging, as not all insurers offer this type of cover. You may need to shop around and compare different options to find the one that suits your situation and preferences.

One way to make this process easier and faster is to use The Home Insurer to help landlords find the best block insurance from a range of UK providers. Given the complexity of this sort of insurance, it is best to call for a discussion and quote on 01832 770965.

For more help and advice about landlord insurance, contact the team The Home Insurer:

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