Whether your property is a small apartment in a much larger building or a luxurious fully detached house, if it is rented out then you are a landlord. As such, you may need special buildings insurance for landlords to ensure that your interests are fully protected.

Why is landlords’ insurance necessary?

If you use your property, or part of your property, for rental purposes then both legally and in terms of insurance, your property is a business. Your interests are commercial, you are gaining income from the property and you have responsibilities and obligations arising from both of those things.

This reality affects your risk profile and therefore how an insurance company will view your property.

For example, you may have:

• the usual risks associated with owning a property, such as natural disasters (storm or flood damage, for example):
• a property that is particularly vulnerable to problems due to vandalism or break-ins, while it is unoccupied for periods in-between lettings;
• claims against you for injuries suffered by tenants or guests while on your premises.

A standard home building and contents insurance policy is not suitable – nor valid – for a buy to let property. That’s why specialised buildings insurance for landlords is typically highly advisable.

What’s wrong with ordinary household insurance?

Nothing at all – providing you are talking about an owner-occupied property!

If your property is commercial, you could only obtain ordinary buildings and contents cover by making a false declaration, followed up by a claim under false circumstances should a problem subsequently arise. This may have serious legal and insurance related consequences and it is not a good idea.

If you already have owner-occupier cover and then start renting out the property (or even a part of it) you may find that your insurance immediately becomes invalid. Typically this may even apply to very short-term summer lets.

What about employees and service companies?

If you have employees that clean and service your properties or that act as caretakers, in some situations the law may demand that you are covered by employers’ liability insurance. This is typically not included in standard buildings insurance for landlords’ policies.

The position with respect to painters, decorators or service companies, may be a little more complicated. Even if they have their own company insurance, you may still have liabilities for their safety while on your property under public liability legislation. It may be worth ensuring that you would be covered for accidents they may have while working for you etc.

Having appropriate buildings insurance for landlords could make the difference between something being a problem for you or a financial disaster.