What’s Missing From Your Landlords Insurance Policy?

As a specialist property insurance broker, Octo Insurance Brokers is frequently approached by landlords and managing agents requiring a review of their existing landlords insurance policies.  When these property portfolio insurance policies come under the microscope, many have serious holes in the insurance protection provided.  Others are way too expensive for the cover offered.

Underinsurance and landlords insurance 

There are reasons for this.  Sometimes, a landlord has tried to purchase their cover online and not had the expert eye of a property-sector insurance broker to assist them.  At other times, their cover has been arranged by a managing agent who may not have been taking their insurance requirements out to specialist brokers, because they were able to gain a commission from brokers willing to split their earnings with them.

More transparency with property insurance commission

Under new forthcoming law (The Leasehold and Freehold Reform Act 2024), there has to be greater transparency over this issue, with managing agents having potentially now to look further afield for cover.  The aim of the legislation will be to ensure that leaseholders get fair value from their insurance arrangements, both in terms of price and the extent of cover offered.  

What landlords and leaseholders have been provided with in the past may not have been the best option available.  This is a fairly common situation, if a policy was not tailored to the precise needs of an insured property.  Off-the-shelf policies have to be a one-size-fits-all, for good reason.  Unfortunately, this can create worrying exposures for property owners, which are typically only detected when a claim is made and when it is too late to put things right.

Elements to consider with landlords insurance

There are some key things to look for in your landlords insurance protection, if you are insuring a larger property such as a block of flats.  For instance, does the policy offer All Risks protection?  Does this include subsidence?  Is there alternative accommodation cover, if you have to move out whilst repairs are undertaken following an incident.  And, is this cover adequate?

What would happen if there was an unauthorised use of your metered utilities? Would you be compensated for the financial loss that you might incur?  Electricity is often found to be misused without the insured’s knowledge.

What if you needed to trace the cost of a water leakage?  Does your policy include trace and access protection, which would compensate for any damage incurred in getting through plaster or flooring, to find the source of a leak?  Or would it simply assess whether to pay out for the damage caused by the water leak itself?  Leaks are notoriously hard to track down.

Does the policy cover underground pipes and cables or is it a case of out of sight and out of mind for such aspects to the property, when the cover is put in place?

Do the policy terms allow for any of the individual flats within your building to be left vacant or rented out as Airbnb holiday rentals? 

Other insurance policies that landlords require

Does the landlords insurance cover package that you have for your property include engineering insurance that could step in and assist if machinery, such as lifts, water pumps and communal water and heating equipment, breaks down?  Do you even have the engineering insurance that ensures your compliance for equipment such as lifts etc?

Whilst examining the overall cover umbrella that you have, you will need to check that it includes employer’s liability protection, to cover any accidents or illnesses incurred by people who are employed by you, or the building, in any capacity.  

Similarly, you should confirm that your Public Liability insurance is in place, and at an adequate limit of indemnity, just in case any visitors to the building incur an injury whilst on the premises, for which you can be held liable.  That loose piece of carpet or stair tread, or cable that was left strewn across the entrance, might just be your undoing, if not.

Is there a legal expenses protection also included?  This cover would pick up any legal costs, should you be sued, or assist with contract disputes that the building has with providers of services to the building.

Cyber insurance and terrorism insurance for property portfolio holders

If you are holding data about your apartment owners, including bank details and personal information, you should really make sure that you have a stand-alone cyber insurance policy in place.  Whilst property policies of old may have inferred some cyber protection was in place within your cover, terms and conditions have been significantly tightened up by insurers and many policies no longer offer any protection at all.

Then there is terrorism insurance.  Unless you have a standalone terrorism insurance policy it is highly unlikely that you would receive any compensation in the event of a terrorist incident.  Terrorism attacks are evolving in nature, on a continual basis, and now not necessarily targeting big and obvious city centre targets. Anyone can find their property damaged or have access to it restricted as authorities erect a cordon. Any landlord could suffer a loss of attraction for the rental of their flats, in the longer term.  

Why landlords need a good property insurance broker’s advice

All of these risks should be seriously considered and appropriate broking advice sought, so that there is business continuity underpinning your operation as a property landlord.

Your property may have other unique aspects that require specific insurance coverage or policy terms.  If you are buying from one online source, these will probably not come to light or, if they do, not necessarily be covered by the policy on offer to you. Your property is unique to you and different from most others.

Furthermore, the more specific your requirements, the more you need choice and guidance – the choice that comes through working with Octo Insurance Brokers.  We have the capacity to search a market of more than 200 insurers and facilities and have access to very niche policies that may be exactly what you require.  This degree of choice also allows us to get you the most competitive premiums, or a policy with more comprehensive covers than you may be used to, for the price you pay for restricted cover right now.

Summing up

Ask yourself what could be missing from your landlords insurance policy and the answer may well be ‘professional broking assistance’.  If you want that, from a broker with over 25 years’ experience in the broking market, and one backed by impressive market buying power and technological solutions that deliver the right policy at the right price, call us today on 020 4576 4092.

Author bio: This Octo insurance article has been produced by Richard Davis, a property insurance broking specialist with over 40 years’ experience in the Scottish insurance and UK insurance markets.