Everything You’ve Ever Wanted to Know About Residents Management Company Insurance
If you own a flat, setting up a residents management company with other leaseholders can be a financially smart way to ensure the building is maintained properly. But if you are named as a director or officer you’ll also be held financially responsible, so getting the right level of insurance to protect yourself and your building is crucial. Insure for too much and you’ll be paying over the odds, but if you under insure and you need to make a claim or someone makes a claim against you, it could be financially devastating.
What insurance do we need?
Different residents management companies will have different needs, so finding a policy that can be tailor-made to cover exactly your requirements will be the most cost-effective way to ensure you have the right level of cover.
Every management company has a legal responsibility to ensure that the building is insured for an appropriate amount to cover rebuilding if something unfortunate does happen. Depending on your location you may also need additional cover, such as All Risks cover to protect you from claims arising from subsidence. And there are other areas to consider where it pays to be insured, such as dealing with problems caused by cleaners and contractors or protection against damage to underground pipes and cables, unauthorized metered water use and legal expenses cover.
Public and property owners liability cover
This protects you from claims arising as a result of anything in communal areas, such as injury as a result of tripping on a loose carpet.
Lessee’s fixtures and improvements insurance
This covers accidental damage or loss to fixtures and improvements in each individual flat. It recognizes that home improvements and fixtures can vary widely from flat to flat and gives resident management companies peace of mind that they won’t be held personally responsible if the building insurance falls short of the actual costs of rebuilding.
Terrorism insurance
The world situation means that terrorism insurance is now an essential consideration for residents management companies. It not only protects in the event of a terrorist attack but also in the event of an explosion or damage linked to terrorism, for example if a resident is storing explosives or making bombs and there is an accident. Whilst you might be tempted to think that none of your residents could possibly be involved, can you ever be 100% sure?
I don’t need employer’s liability insurance, do I?
Consider carefully if you might need employer’s liability insurance. Even if money is only given cash-in-hand to a fellow resident to carry out maintenance and repairs, they can make a claim against you if something happens whilst they are carrying out that work. Whilst you might think that you can save some pennies in the short term by not including it, in the long term, it could cost £thousands.
Finding the right level of cover at the right price can be quite a challenge
The Leasehold Advisory Service (LEASE) provides information and resources for leaseholders, including information on insurance. Contact Park Insurance’s expert residents management company insurance team for free advice and a quote. With over 20 years industry experience, we’re trusted to make things as easy as possible for directors, tailor-making policies to suit individual requirements and to keep premiums down and residents happy.
Call us on 0117 955 6835 or get a quote here.