Apartment Block Insurance – What does it include and what is NOT Covered?
Apartment Block insurance is designed to provide cover for Managing Agents / Owners Management Companies / Block Owners or Residents Associations where there is a single building / multiple blocks of individual, self-contained apartments or commercial units with shared common area spaces internally or externally.
It is intended to provide cover for Damage to the property both accidental and/or malicious, the grounds & landscaping which could include playgrounds and any common area or amenity contents. These common areas could simply be the entrance halls & landings of the development or it could cover more extensive amenities such as gyms, communal lounges, meeting rooms or Creche facilities.
Written into the policy would be additional & necessary covers such as Fire brigade charges to reimburse you for the fees charged by the Fire Brigade to come out and investigate or extinguish a fire. Loss of metered utility supplies is covered where there is an insured leak of oil or water. Trace & Access cover should be part of the offering to provide cover for the costs of seeking out the source of the leak.
Most apartment block insurance policies should also provide cover for Alternative accommodation / Loss of rental income as a result of an insured claim. If you have to vacate the building due to an incident, you want to know that you won’t have to pay additionally to live somewhere else while the repair works are being completed in your apartment. And as a landlord of an apartment in the block, you don’t want to be at a loss financially as a result of something beyond your control, nor do you want your tenants to lose out either.
All good apartment block insurance policies will include Public Liability (and or Property Owners Liability where relevant) cover for third parties be it property damage or injury claims. This liability cover will extend to all common areas both inside and outside of the block on the development land site. But it will not include the liability within the individual units. This is something that needs to be purchased separately by the owners of each unit when insuring their own contents.
Employers Liability cover for directly employed maintenance personnel, gardeners, cleaners is essential to ensure that you are fully covered in your duty of care to those working on the block (s). Most policies will have a clause extending this cover to minor/non structural property repairs & maintenance of casually employed individuals.
The following are examples of claims where the Apartment Block Insurance policy paid out and shows the importance of having a comprehensive policy in place;
- A fire in a block causing extensive damage to the building. The policy not only provided full cover for the cost of repairs but also paid alternative accommodation costs to all residents (owners & tenants) while works were being completed.
- A resident slipped on the stairs entering the building during an icy period which had not been salted/gritted and substantially injured themselves. The claim was finally settled against the OMC and damages paid to the resident.
- There was damage on the roof of the block as a result of intensive storms resulting in both structural and Fittings damage to the apartments below. Unfortunately at the time, the owners were on holidays and this damage was not noticed until the water came through the lower apartment ceilings. Total claim paid or both property damage and alternative accommodation. This claim also included costs for the trace & access works to establish where the cause of the leak came from.
What is not covered by Apartment Block insurance and should be taken out additionally?
Directors & Officers Liability Cover for the Managing / Owners Management Company
Statutory Inspection cover for Lifts within the block (your maintenance contract DOES NOT fulfil your statutory requirement)
Legal Liability and Contents cover for the individual owners & tenants of the units
Any trading risk insurance for commercial tenants / owners
Additionally, where Financiers are involved in the purchase of blocks, there will be specific financier requirements laid out in the Insurance Clause section of the purchase / facility agreement that will need to be met by your Apartment Block insurance policy. These can include but are not limited to Full & Composite insured titles for all parties, an excess layer of cover for Liability Cover, Full Terrorism cover for both the property damage and liability sections, Sole/First Loss Payee Clauses and specific indemnities to be noted. We have markets who can provide all of these requirements as they are not widely available on the market.
For further information regarding Apartment Blocks Insurance or Property Owners Insurance, please click HERE.
Contact S.A. Faughnan (Brokers) Ltd. on 018245555 or at newbusiness@safaughnan.ie or visit us at www.safaughnan.ie
