What should be included on a landlords insurance policy?
There are a range of factors that dictate what needs to be included on a landlords insurance policy. Where you have commercial premises leased out, a key consideration might be what sort of businesses are operating on your property. Additionally, you will assess the specific risks they may pose.
That being said, there are a number of ‘core’ covers that you would typically expect to see as part of a well designed property owners insurance policy:
Building and contents insurance. The buildings themselves will be your most valuable assets. Therefore, if you own them outright, it makes sense to protect them from all potential perils such as fire and flooding. Where its mortgaged, it will almost certainly be a condition of your lender to have some cover in place. In addition to this, it’s worth ensuring that properties are correctly valued. So, if you have a large number of properties and market values have gone up by 10% in the last year, you could be at significant risk of being underinsured.
Public Liability Insurance
You will have members of the public on your property all the time. Simply, it could be something as easy as a visitor slipping on a freshly mopped floor in a communal corridor. Hence, Public Liability Insurance protects you from costs in the event that a member of the public alleges that they have been injured or had their property lost or damaged as a result of your business activity.
Employers Liability Insurance
If you have people working for you, even if part time or on a contractual basis, its required by UK law that you have a minimum of £5m EL cover in place. So no matter whether you have a property management team, groundsmen and maintenance staff, you will need to take out an appropriate level of cover.
Sometimes referred to as rent guarantee insurance, this protects you in circumstances where a tenant is unable to occupy the property as a result of damage – due to a fire or flood, for example.
If a set of keys to a property are lost or stolen, this will cover the cost for replacing them.
What else should Landlords consider when taking out their insurance policy?
Moreover, if you are a residential property landlord, you will need to take out specialist cover if a property is unoccupied for a period of time. Although, most standard policies won’t protect you if a property is unoccupied for a period of over 30 days. However, it could be that you’ve only just acquired the property and have yet to find tenants, you’re in between tenants, you’re refurbishing or decorating or that you let to students who won’t be around across the summer month.
In addition to this, for commercial property landlords, it’s a similar story. You might own a large number of retail property units. While you will be looking to keep your occupancy rates high, it might be that from time to time a unit is left empty for a period. Therefore, you will need to make sure that you have appropriate unoccupied commercial property cover in place in this situation.