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The Essential Policies Every Landlord Should Have, A Guide to Directors' & Officers' Liability Insurance, Plus More
Welcome to West Craven's October newsletter.
In this edition, one in five homeowners do not have home insurance, we discuss whether vandalism insurance is suitable for your business.
Also this month, we share a guide to directors' and officers' liability insurance and we reveal the types of insurance policies every landlord should have.
One in Five Homeowners Do Not Have Home Insurance
A recent study of the British Homeowner priorities discovered that more than 1 in 5 do not currently have a home insurance policy in place.
When pressed for a reason for not purchasing cover, many admitted that they simply wanted to avoid the extra cost of paying for a policy. A further 10% admitted that they had a claim rejected by their insurer due to an invalid policy or an insufficient amount of cover.
As part of a push to understand the British public’s understanding and perceptions of home insurance, coverbuilder conducted a survey of over 2250 homeowners, in an attempt to highlight the issues UK homeowners face.
79% of homeowners asked revealed that they had a home insurance in policy. 67% of that number said they only had a home insurance policy because a mortgage lender with a financial interest in the property had insisted one be put in place as a condition of their offer.
The 21% of respondents who admitted to not owning a home insurance policy were asked to reveal the reason. 37% said they wanted to avoid having to pay for another bill, 18% claimed they had simply forgotten to renew their previous policy and 9% admitted that they had failed to find the correct cover.
Additionally, those who admitted to having no cover were asked to reveal the area of the country they resided in, in an attempt to discover the most underinsured area.
The North East, West Midlands and South West proved to be the most underinsured areas of the country, with 14%, 13%, and 12% of homeowners admitting to having no home policy in place. Yorkshire (2%), Northern Ireland (5%), and the North West (5%) had the least uninsured homes.
• Yorkshire and Humberside – 2%
• Northern Ireland – 5%
• North West – 5%
• South East – 5%
• East Midlands – 6%
• East of England -7%
• Wales – 9%
• London – 10%
• Scotland - 12%
• South West - 12%
• West Midlands - 13%
• North East - 14%
Finally, all of those who participated were asked if they had ever had an insurance claim rejected by an insurer, with 9% saying that this had happened to them previously. When asked to provide a reason, the majority (55%) claimed it was an error on their part and that they didn’t provide accurate information on their situation to their insurance company. 39% said they didn’t have the right policy for their claiming needs. The good news is 81% felt they learned their lesson from the experience.
If you are concerned that you may not have adequate insurance, get in touch with West Craven Insurance. Our expert team can assist you in finding the perfect policy, with the right amount of cover and for a fair price.
Is Vandalism Insurance Suitable for Your Business?
Vandalism insurance is a sad result of the times we live in. Slowly, the policy has gone from a bolt-on policy to an absolute essential. Vandalism can have a huge financial effect on your business, so it’s important to have protection.
You won’t usually find a single vandalism policy, however, you can build the policy from multiple options to cover repair and replacement costs and minimise lost income. It’s a case of choosing the covers that are right for you.
Every insurer will have a different definition of the type of insurance you need (if they even offer it). Generally, it’s treated as malicious or willful damage to or destruction of someone else’s property. Nearly all the insurers will likely stipulate that the damage must be reported to the police immediately before they will even consider paying any money. There will likely also be a need for supporting evidence. A vandalism policy will usually pay out to cover repairs or replacements of contents. You can usually combine this policy with a business contents insurance policy.
Ensure you read the policy documents as carefully as possible to make sure you’ve definitely got the level of cover you’re looking for. Some buildings and contents insurance might cover vandalism, but every insurer is different, so make sure you do your research.
Why is it so important?
Businesses are at risk of vandalism at all times, from random acts like graffiti or damaged exteriors to targeted attacks. If you own the building, having a policy to assist with the costs of repairs are vital.
If you do not own the property, it is likely that your landlord will have the correct policies, however, it’s always a good idea to double check. It’s also worth noting that any additions you make to the property (for example air conditioning) will not be covered by the landlord’s policy, meaning you might need a tenant’s improvement policy, which will assist with the repair and replacement cost.
Even with the landlord’s insurance covering the costs, it’s possible you might be asked to leave the property whilst it receives repairs. If this is the case, you could lose thousands in lost revenue. A business interruption policy can assist you with the money you lose due to having to leave your premises.
A Guide to Directors' and Officers' Liability Insurance
As the world becomes more and more litigious, directors and officers are frequently targeted for lawsuits regarding professional wrongdoing. The financial implications and bad press can be enough to bring down entire companies.
Does my business need a Directors’ and Officers’ Liability policy?
Does your business have:
• Directors
• Key managers
• Have a large or high-profile that is in the public eye
Anyone of these criteria means a Directors’ and Officers’ (D&O) liability policy could be a helpful protection for you and your business.
A D&O policy protects your senior staff against claims for compensation made by investors, employees, shareholders, regulators or interested third parties. The policy can assist with paying the cost of damages, fines, and legal fees for your senior management team.
It should be noted that whilst a D&O policy offers financial protection for claims concerned with alleged acts of professional negligence, it does not include protection for intentionally committed illegal acts, although a D&O policy can cover your directors and key managers if they breach a criminal law, civil law or infringe on a best practice regulation.
For example, should one of your employees be injured or killed in a workplace accident, your HR director could be sued by the employee, their family or even a Health and Safety Executive.
So what do I need to consider?
The number of directors and officers that you have on your board.
A small business with 2 or 3 directors might need &1 million in cover.
The scope of your business and its activities
A larger organisation might need anywhere between &50m - &300m
Should you not hold a D&O policy, your directors and officers face a greater risk of being unable to afford the costs of defending themselves against:
• Civil proceedings which can carry considerable legal costs and awards for damages
• Disqualifications from holding the position of director
• Criminal prosecution which can lead to fines and possible imprisonment
A Guide to the Types of Insurance Policies Every Landlord Should Have
As a landlord, it is vital you properly safeguard every aspect of your portfolio. Should there ever be issues with collecting rent, damage to your contents, a home emergency, or an injury that you are liable for, you could be out of pocket financially and unable to afford the costs of your property.
There are policies tailored to the types of risks landlords face. Find out more below.
Landlord Liability
Should a tenant injure themselves on your property, as a result of something in your property, such as loose tiles or a carpet, then you could be held liable. If the injury leads to a lawsuit, a liability policy can protect you.
• Your legal costs in defending a claim
• Damages awarded to the claimant
• The claimant’s legal costs, if you are found to be at fault
Landlord liability is often a legal requirement if you are renting your properties as student accommodation of social housing. As a safeguard, it could be argued that it is an essential policy to have in place.
Are your properties furnished? You might want to consider a contents insurance policy.
It is standard practice for most landlords to let their properties on the condition that the tenant can prove they have a contents insurance policy ready to be put in place on the day of the move. However, if your properties are furnished or semi-furnished, you might want to think about getting your own policy.
Items such as beds and sofas, TV’s, kitchen appliances, and carpets can all be protected against damage or theft by tenants or third parties. The only thing you will need to clarify with your tenants is the policy protects your contents and does not extend to their personal items.
Do you own a buy-to-let mortgage?
Landlords that have invested in property solely to rent it out, will usually own a buy-to-let mortgage. Most providers will insist that you have loss of rent insurance to cover your rent should you not have a tenant for an extended amount of time, or if your current can’t (or won’t) pay the rent.
Loss of rent cover also protects you, should a fire or flood make your property uninhabitable. Your tenant will no longer be required to pay you rent, which could put your mortgage in jeopardy.
What about the inevitable home emergency?
Every landlord lives in fear of the dreaded phone call, reporting a burst pipe or a broken boiler. To add insult to injury, the cost of an emergency call out can be quite high. A home emergency insurance policy can assist in covering the costs of emergency repairs and call-outs.
The policy can also assist with the costs of maintenance work like boiler services, which can help to prevent any serious breakdowns.
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