How to arrange buildings insurance for your block

Who insures

The lease says who must insure the building. In most blocks the landlord (your company) insures the whole building and recovers the premium through the service charge.

What to cover

• Reinstatement value: the cost to rebuild, not the market value of the flats. Get a professional reinstatement valuation every few years, as underinsurance can reduce claims.
• Property owners’ liability for injuries in the common parts.
• Terrorism cover where required by the lease or lenders.
• Engineering inspection for lifts and plant, often required by law.
• Directors’ and officers’ insurance, protecting volunteer directors personally. Usually recoverable through the service charge if the lease allows management costs.

Commissions and fees

Since 2023 the FCA has banned brokers from passing on remuneration to freeholders or agents that is not linked to a real service, and requires disclosure of commissions to leaseholders. The 2024 Act will add “permitted insurance fees” when it comes into force. A leaseholder-owned company has no reason to take commission: keep it simple and disclose everything.

What leaseholders can ask for

Leaseholders can request a summary of the cover and inspect the policy (section 30A). On Freeholdpilot the policy summary is visible to every leaseholder anyway.

Claims

Report incidents promptly, keep photos and invoices, and check the excess: who pays it is usually set by the lease.