There are a number of policies
available to the owner of a block of flats. Of main concern, will of course be
the fabric of the building. In almost all cases, out side of Scotland , the
freeholder will arrange the insurance and charge the leaseholders accordingly.
When you buy a lease on a flat in a block, you are really only buying the right
to occupy a certain space within the building for a set period of time. As well
as your own space, you may also be allowed to use the communal areas and the
garden if applicable. Some blocks of flats, include a swimming pool and gym or
other such facility and your rights will be specified in the lease. The
freeholder usually retains the right and obligation to arrange the insurance, he
will also own the land on which the building stands and the fabric of the
property itself. If there are four flats within a block, it is usual to charge
the insurance out at 25% of the annual premium per flat. In some blocks,
particularly, conversions, where maybe one flat is bigger than another, the
apportionment is calculated on a square footage basis.
Many people do not like insuring
on this block basis and try to make their own arrangements. Whilst this is not
impossible to do, it is not to be recommended and the Association of British
insurers confirm this view. The reasons are quite simple, if everyone in a block
were allowed to make their own flat insurance arrangements, it could turn in to
a very difficult situation if and when a claim occurred. Also imagine a scenario
where a serious fire occurs at a flat in the block at that owner has forgot to
renew his or her insurance policy, this could impact of the rest of the
residents in the building. Arranging a block policy is considered to be the best
option and should help to make sure there are no gaps in the cover.
The polices on offer will cover
a range of perils that are not dissimilar to those available under a standard
home insurance policy, some offer extra covers such as employers liability or
even such things as removal of wasps or bees nests. One extra many policies give
is a sum insured for communal contents . This section of the policy is designed
to cover items that are left in hallways and shared areas such as wall
decorations, furniture, carpets and curtains. It will only offer cover for items
that would not seem more correctly insured elsewhere. Basically if your flat is
full and you decide to leave some of your belongings out on the landing and they
are stolen, then because they are yours, any claim should be made under a
personal contents insurance policy.
It is fair to say that the
number of insurers that are prepared to provide a quotation for a block of
flats is nowhere near as large as those that offer cover on single dwelling
houses, however, there is still a very competitive market. Premiums in total
should be on a par with standard home insurance and if you live in quite a big
block, with a high sum insured, then you may even find that you qualify for a
discount. Many insurance companies offer fairly big discounts for high sums
insured , based on the assumption that is is unlikely that any claim will ever
necessitate in the whole building having to be reinstated.
Blocks of flats fall in to two groups.
-
Purpose Built. These
buildings were designed and built to be used as residential blocks of flats.
Often considered by many insurers to be a better risk, they mainly have a
concrete shell which can act as a fire break.
-
Conversions. These can
be converted houses, or even former factory or commercial buildings. Many
insurers do not offer the same discounts for sum insured size on these
buildings as in the main they have wooden flooring.
As well as your basic building &
contents insurance, a number of extra covers are available for consideration.
Depending on the location of the building, you may like to consider, Terrorism
cover. Some policies will include this as part of the core wording but in the
main, it is an optional extra, with premiums very much dependent of the location
of the building.
Engineering insurance is
available for block of flats that have lifts or boilers or other plant equipment
on the premises. Some have electric gates, some have swimming pool pumps and a
visit from an inspector from an insurance company can usually help you ascertain
the items of equipment that need to be inspected. Some items have a statutory
requirement to be inspected periodically, this work is usually carried out by an
insurance company who can provide the inspection service without insurance.
However, sudden and unforeseen damage, fragmentation and breakdown cover may
also be available as part of the same policy if required.
Directors and Officers Liability
Insurance cover protects companies’ directors, officers and senior managers
against claims arising from their decisions and actions taken whilst managing
their business. The duties of a director have been established through statutes,
regulations and case law . The law makes no distinction between a well meaning
individual and a director of a large company, they're all subject to the same
rules and regulations. Many management blocks now have directors, mostly unpaid
and all need to consider the law and how to obtain protection for their duties.
Common law requires Directors to act with ‘the
care an ordinary man would take in the same circumstances on his own behalf’ and
with the skill expected from someone with his ‘particular knowledge and
experience. In recent years, the probability of a claim against a director or
officer has been increased due to development in legislation, such as the
Companies Act 1985, The Insolvency Act 1986 and The Company Directors
Disqualification Act 1986, Health & Safety at work Act 1974. Directors of Blocks
of Flats should consider their duties carefully.
Claims can arise from a number
of unexpected quarters but in the main they arise from other residents who
believe that the director has acted in such a way that has resulted in them
suffering a financial loss. Claims can sometimes arise when a flat is placed on
the market and a sale falls though, as result of some action or inaction of a
director . Other contentious areas pertain to sourcing competitive insurance
premiums and the quality of tradesmen's work.
