In the realm of property management, especially for residential blocks of flats and apartments, a block management company plays a vital role in maintaining and safeguarding the properties under its care. One crucial aspect of this responsibility is insurance. Insurance in block management is essential for protecting both the property and the interests of leaseholders and freeholders.
Understanding Block Management Insurance:
Block management companies oversee the management of multiple properties within a residential block, ensuring that communal areas, shared facilities, and the overall building structure are well-maintained. One of their key responsibilities is to arrange suitable insurance coverage for the block. Block insurance, also known as property owners’ insurance or block buildings insurance, is a policy that provides coverage for the entire building and common areas.
What’s Typically Covered?
Buildings Insurance: The core component of block management insurance covers the structural aspects of the building, including the walls, roof, foundations, and floors. This policy typically includes protection against risks such as fire, flood, subsidence, and structural damage.
Communal Areas: Block insurance extends to communal areas within the property, such as hallways, staircases, lifts, and shared gardens. Any damage or loss to these areas is usually covered.
Liability Insurance: Block management insurance often includes public liability insurance. This protects against claims made by third parties, such as visitors or contractors, who might suffer injury or damage within the communal areas of the property.
Legal Expenses: Some policies include legal expenses coverage, which can assist with legal costs related to disputes, leasehold matters, or pursuing claims against third parties for property damage.
Alternative Accommodation: In the event of a significant insured incident, like a fire that renders the property uninhabitable, some policies provide coverage for alternative accommodation for the affected residents.
What’s Typically Not Covered?
Contents Insurance: Block management insurance does not cover the personal belongings of individual leaseholders or tenants. Residents are advised to obtain their own contents insurance to protect their possessions.
Tenant Liability: Damage or loss caused by tenants or leaseholders within their own private apartments is usually not covered. Leaseholders should consider obtaining their own liability insurance if needed.
Wear and Tear: Normal wear and tear of the building or communal areas is typically excluded from coverage. Insurance is designed to protect against unforeseen events and damage rather than gradual deterioration.
Unoccupied Property: If a property within the block becomes unoccupied for an extended period, it may affect the insurance coverage. Some policies impose conditions regarding unoccupied properties, so it’s essential to inform the block management company if a property will be vacant for an extended time.
Pre-Existing Damage: Damage that existed before the insurance policy was taken out is generally not covered. It’s crucial to document and address any pre-existing damage before securing insurance.
Additional Considerations
Excess: Block management insurance policies often come with an excess, which is the amount the policyholder must contribute towards a claim. It’s essential to understand the excess amount, as it can vary depending on the policy and the nature of the claim.
Valuation: The insured value of the property should accurately reflect the cost of rebuilding, including professional fees and site clearance. An inaccurate valuation can lead to underinsurance and potential issues when making a claim.
Claims Process: In the event of a claim, residents should follow the prescribed claims process outlined in the policy. It’s crucial to report any incidents promptly and provide all necessary documentation to support the claim.
Reviewing Coverage: Block management companies should periodically review insurance coverage to ensure it remains adequate and cost-effective. Changes in building values, refurbishments, or alterations may necessitate adjustments to the policy.
Compliance: Block management companies must ensure that their insurance arrangements comply with legal requirements and regulations governing property management. Failure to do so can result in legal issues and penalties.
Insurance in block management is a complex but essential aspect of ensuring the protection and well-being of residential blocks of flats and apartments. Understanding what is typically covered and what is not is crucial for both block management companies and residents. By providing comprehensive coverage for building structures, communal areas, public liability, and legal expenses, block management insurance offers peace of mind and financial security. Residents should also be aware of their responsibility to obtain contents insurance to protect their personal belongings within their apartments.
