Commercial insurance on Residential Flats

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    Commercial insurance on Residential Flats

    in a nutshell our management company formed several years ago and the freeholder appointed a friend of his family. As I understand it one of the blocks in our building was set up as the management company address. After a couple of years or so our insurance premium doubled per flat. We were advised that this was because the previous policy was inadequate and didn’t cover the rebuild of the entire building.

    Recently we have been told we have to have an EICR certificate and have been given less than 2 weeks to get one. I have researched this and can not find any legal requirements for residential dwellings to have one. My electrics are all modern as is my fuse box.

    When challenging this I was brushed aside and told that one of the blocks (the management company one) is down as a business for renting out property so we have a commercial insurance. So it looks like that to accommodate one block the other 4 blocks are having to pay the additional premiums and are required to have these certificates as part of the insurance conditions for commercial insurance.

    No one has seen a copy of the policy.

    Can anyone provide any advice.


    There doesn't have to be a law requiring one for the insurance company to make it a condition that there is one.

    Except possibly for HMOs I don't think there are any laws requiring EICRs.

    If the flats have communal areas, they are subject to health and safety an fire safety law as a business. That applies to all blocks. Communal areas of all blocks of flats are treated as businesses.

    I don't think having the management company registered office in the block is making a difference; otherwise a very large number of blocks of flats would be affected.


      Thanks I appreciate that it doesn’t have to be in order for an insurer to request but as I understand it a commercial insurance policy usually requires one of these certificates whereas regular residential insurance does not. Do you think we are likely overpaying for a commercial policy versus a residential one. Also are there any other implications for the communal areas etc being classed as commercial?

      My my main concern is we’re paying more for a policy we don’t need.


        A block of flats policy is not a normal residential policy. It is as specialist class of policy.


          So it should be commercial?


            It's typically handled by the commercial insurance part of the insurer, but I'd say it was in a class of its own.

            I'd only expect them to require an inspection certificate for the communal part, unless you are a conversion to pre 199x building standards. Ours hasn't so far.



              Any leaseholder of a residential property can send a written request ( by registered post ) to the Management company for a summary of insured cover for your building and get a reply within 21 days.


              After you know the name and adress of the insurance broker , you can ask :

              1. If the policy is for commercial property or block of flats

              2. what commssion paid is under the policy to the management company and freehold company.


                Hi thanks for that,

                I’ve been sent a certificate of cover that basically says the building is insured for £x million and a complete property owner policy wording document. Should there be anything else, what would the summary usually entail?

                So I can call up the insurance broker and ask about the policy type/commission or must it be a written request?

                thanks so much


                  Yes, you can ask both the broker and the insurance company to declare what commission is paid under your building insurance policy.

                  If they are not willing to disclose , then suggest you may report to FCA which is the regulator and supervisor for financial products in UK. customers



                    Is there a preferred format letter for this?


                      Anyone help with a standard letter?


                        A business letter, identifying the legislation, the property, and your relationship to the property, and saying what information you require. Preferably it should also reiterate the deadline from the legislation.

                        Take a look at Lease Advice's standard letter requesting a summary of the accounts. That also includes details of the, theoretical, criminal sanctions.


                          Sorry is that on this website or a different one?


                            Insurance for a block of flats will almost always be a commercial policy. So that is irrelevant to the problem you have.


                              It' on Lease Advice's web site. If you are not aware of that site, as someone involved with leasehold residential property, you should be. They are slight controversial because of how they supplement government funding, but there is still a lot of useful information, and a free advice service.


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