Liability cover

Property Owners Insurance

Again the name is self-explanatory. A Property Owners Insurance policy is primarily designed to cover let properties though can also include land. The properties that can be insured range from single ‘buy-to-let’ type residential properties and small retail units to large industrial units and portfolios of properties.

Property Damage is once again a core section and most policyholders will take ‘All Risks’ cover including ‘Subsidence’. For certain types of properties such as unoccupied or those let to students or tenants receiving housing benefits the cover may be restricted. Typically unoccupied properties have been limited to FLEE cover (Fire, Lightning, Earthquake & Explosion) though in recent years some specialist insurers have been willing to provide wider cover including Storm, Flood and Malicious Damage providing the property is secure & regularly inspected. Most policies will also include cover for Property Owners Liability (damage or injury to third parties) and Loss of Rent Receivable.

The major rating factors with this type of insurance is the location, construction and occupancy. Following the introduction of detailed flood-mapping systems by insurers in recent years some properties close to rivers or the sea or in low-lying areas may not be offered Flood cover or very high excesses will apply, sometimes in the tens of thousands of pounds.

Properties built of modern materials are typically known as ‘standard construction’ or BSST (brick, stone, slate, tile) in insurance jargon. Any variance to this must be disclosed to insurers such as cob (reasonably common in older properties in the south west) or any areas of flat roof, particularly felt on timber. The materials used in the construction of industrial units vary wildly. Brick, concrete block and profile steel or fibre-cement (asbestos-type) cladding are considered to be ‘standard’ however many industrial buildings now have composite-panel cladding to reduce noise pollution & increase heat retention. The core material used in these panels is of particular interest to insurers and will have a significant bearing upon the premium charged. Older panels such as Polystyrene are extremely flammable and fire fighters won’t normally enter buildings built using this material unless there is a risk to life. More modern fire-resistant cores such as Polyisocyanurate (PIR) & mineral wool (Rockwool) are generally acceptable to insurers but need to be declared.

With residential properties working (sometimes referred to as professional) or retired people are considered standard risk and attract the lowest premiums and excesses. As previously mentioned properties occupied by students or people receiving benefits (previously known as DSS) attract a higher rate and not all insurers will quote. The same applies with unoccupied properties. With commercial properties the business of the tenant and their activities are key so, for instance, a wholesale florist will attract a much lower rate than a joinery or a fireworks supplier. The occupancy of any adjoining properties is also important, especially if there isn’t a full fire separation between the buildings.

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