Common Areas Buildings Insurance for Blocks of Flats & Apartments

Common areas buildings insurance covers the structure of the building and all shared spaces (hallways, stairwells, lifts, roofs, gardens, etc.). This is typically arranged by the freeholder or management company and the cost is recovered through service charges.

Individual flat insurance (also known as contents insurance) covers the leaseholder's personal belongings, fixtures and fittings within their flat, and their personal liability. The freeholder's policy does not cover leaseholders' contents.

The responsibility for insuring common areas depends on the ownership structure:

• Freeholder - Usually responsible for arranging buildings insurance for the entire structure and common parts
• Residents' Management Company (RMC) - If the leaseholders have formed an RMC, they take on this responsibility
• Right to Manage (RTM) Company - When leaseholders exercise RTM, they become responsible for insurance
• Managing Agent - May arrange insurance on behalf of the freeholder or RMC

The lease or transfer deed will specify who is responsible. We can help clarify your obligations.

A comprehensive common areas buildings insurance policy typically includes:

• Buildings cover - The structure, fixtures, and fittings in communal areas
• Property owners liability - Protection against claims from residents or visitors injured in common areas
• Employers liability - Required if you employ staff (caretakers, cleaners, etc.)
• Legal expenses - Cover for legal disputes with leaseholders or contractors
• Loss of rent/service charge - If the building becomes uninhabitable
• Accidental damage - Optional cover for accidental damage to the building
• Engineering inspections - For lifts, boilers, and other equipment

The cost of common areas insurance depends on several factors:

• Size and type of building (number of flats, storeys, construction type)
• Rebuild cost of the property
• Location and security features
• Claims history
• Level of cover required
• Additional covers (accidental damage, engineering inspections, etc.)

Premiums are typically apportioned between leaseholders through service charges. We compare quotes from specialist insurers to find the most competitive premium for your block.

Yes, if you employ anyone to work in or maintain the common areas (caretakers, cleaners, gardeners, handymen, etc.), you are legally required to have employers liability insurance. This covers you if an employee is injured or becomes ill as a result of their work for you.

The minimum cover required by law is £5 million, though many policies provide £10 million as standard. Even if you only use contractors, you should check whether they have their own employers liability insurance, as you could be held liable if they don't.

Property owners liability insurance (also known as public liability insurance) protects you if someone is injured or their property is damaged as a result of your negligence as the owner of the common areas. For example:

• A resident slips on a wet floor in the hallway
• A visitor is injured by falling masonry from the building
• A car is damaged by a fallen tree from the communal grounds

The policy covers legal costs and compensation payments, typically up to £5 million. This is essential protection for freeholders and management companies.

Yes, you can change insurance provider at renewal. However, there are some considerations:

• Check the terms of your lease - some leases specify that the freeholder can choose the insurer, while others require consultation with leaseholders
• If you're an RMC or RTM company, you may need to follow proper procedures and consult with leaseholders
• Ensure there's no tie-in clause or long-term agreement with your current insurer
• Give proper notice to your current insurer (usually 28 days before renewal)

We can help you navigate the process and ensure a smooth transition to a new policy with better cover or competitive premiums.

If the building is underinsured (the sum insured is less than the full rebuild cost), any claim payment will be reduced proportionally under the "average" clause. For example, if the building is insured for £500,000 but the rebuild cost is £1,000,000, you're only 50% insured. A £100,000 claim would only pay out £50,000.

This can leave the freeholder or management company liable for the shortfall, which may need to be recovered from leaseholders through service charges. We recommend having a professional rebuild cost assessment carried out regularly to ensure adequate cover. We can arrange this for you.

Yes, it's highly recommended. A rebuild cost assessment (also known as a reinstatement cost assessment) determines the correct sum insured for your building. This is different from the market value of the property.

The rebuild cost includes:

• Cost of rebuilding the structure
• Professional fees (architects, surveyors, solicitors)
• Demolition and site clearance costs
• Compliance with current building regulations

We can arrange a professional rebuild cost assessment to ensure you have the correct sum insured and avoid underinsurance.

Managing agents have professional obligations and can be held liable for errors or omissions in their work. For example:

• Failing to arrange adequate insurance cover
• Not maintaining the building properly
• Mishandling service charge funds
• Breaching health and safety regulations

Managing agents should have their own professional indemnity insurance to protect against these risks. The common areas buildings insurance policy does not cover the managing agent's professional liability.