What is block of flats insurance in simple terms?

Block of flats insurance is a specialist buildings policy designed to cover:

• The structure of the building (walls, roof, floors, communal areas, etc.)
• The freeholder / landlord / management company’s legal responsibilities
• Some financial losses connected to damage (like loss of rent or alternative accommodation, if included)
• It normally sits alongside each flat owner’s own contents insurance, which covers their personal belongings and interior items.

What does block of flats insurance usually cover?

Every policy is different, but most decent UK block of flats policies will include the following core areas.

1. Buildings – the fabric of the block

This is the main purpose of the policy.

Typically covered:

• Walls, roofs, ceilings and floors
• Communal areas: halls, stairwells, lobbies, bin stores
• Fixed fixtures: fitted kitchens, bathrooms, built-in wardrobes (depending on lease wording)
• Communal installations: pipes, cables, drains, lifts, solar panels, boilers serving more than one flat
• Outbuildings and communal structures: bike stores, garages, bin stores, gates and fences (if within curtilage)

Covered events usually include:

• Fire, smoke and explosion
• Storm and flood
• Escape of water (e.g. burst pipes)
• Impact damage (vehicles, falling trees)
• Subsidence, heave and landslip (sometimes optional)
• Riot and civil commotion
• Theft and attempted theft (damage to the building)

Policies are designed to cover the full rebuild cost, not just the market value, so an accurate valuation is vital.

2. Property owner’s liability

If someone is injured or their property is damaged because of the condition of the building, they may bring a claim.

Typical examples:

• A tile falls from the roof and hits a parked car
• A visitor slips on a badly lit, wet communal stairwell
• A loose handrail causes a fall

Property owner’s liability cover usually:

• Protects the freeholder / landlord / RTM company / residents’ management company
• Pays legal defence costs
• Pays compensation if you’re found legally liable (up to a stated limit, often £2m–£10m)

3. Alternative accommodation & loss of rent

If the block becomes uninhabitable due to an insured event (e.g. serious fire, flood):

• Alternative accommodation: covers the cost of rehousing leaseholders / tenants while repairs are carried out
• Loss of rent: compensates the landlord for rental income lost during the repair period

These may be:

Included automatically, up to a percentage of the building sum insured, or

Optional add-ons with chosen limits

It’s crucial for landlords who rely on rent to cover mortgages and service charges.

4. Communal contents (sometimes)

Block of flats insurance can include communal contents – items owned by the freeholder or management company in shared spaces.

Typically covered:

• Carpets and furniture in hallways and lobbies
• Communal white goods (e.g. in laundry rooms)
• Cleaning equipment and tools stored on site

Not usually included: personal belongings of individual residents. Those should be covered by their own contents insurance.

5. Employers’ liability (if you have staff)

If the freeholder, managing agent or residents’ management company employs staff, even casually, employers’ liability is usually required by law.

Examples:

• Caretakers / porters
• On-site cleaners or gardeners on PAYE
• Handymen employed directly
• Employers’ liability covers:
• Injury or illness suffered by employees in the course of their work

Compensation and legal costs, typically up to £10m

If you only use external contractors (e.g. a cleaning company), you’d normally expect them to carry their own employers’ and public liability – but this should be checked.

6. Accidental damage (sometimes standard, sometimes optional)

Many block of flats policies provide accidental damage cover either:

As part of the core wording, or

As an optional upgrade

Accidental damage examples:

• A contractor drills through a pipe
• A resident accidentally cracks a communal glass door
• Damage to flooring or décor in communal areas caused by a one-off mishap

Check the wording carefully – some “basic” policies only cover specific perils (fire, storm, etc.) and not wider accidental damage.

7. Damage to services and underground pipes

Most good policies cover:

• Accidental damage to underground pipes, cables and drains serving the property
• Often includes the cost of tracing and accessing the source of a leak (“trace and access” cover) up to a limit
• This matters a lot for escape of water or long, hidden leaks.

Optional add-ons you might want

Depending on the block and risk profile, you might see or want these extras:

Terrorism cover – often excluded as standard and available as an add-on, especially important in city centres or where lenders insist on it.

Directors & Officers (D&O) insurance – protects directors or officers of residents’ management companies / RTM companies for claims alleging mismanagement of the building or finances.

Legal expenses insurance – for disputes such as evictions, contract issues, or pursuing third parties for property damage.

Engineering inspection & breakdown – for lifts, boilers, gates and other plant that requires statutory inspection or breakdown cover.

These don’t automatically sit inside the block of flats policy but are commonly arranged alongside it.

What does block of flats insurance not cover?

Just as important as what’s included is what’s excluded or falls outside the policy altogether.

1. Residents’ personal contents

Not covered:

• Furniture, TVs, laptops, clothes, jewellery, personal items inside individual flats
• Upgrades or betterments sometimes installed by leaseholders (depending on lease wording)

These belong under contents insurance for each flat. The block policy is about the building and communal property, not people’s belongings.

2. Wear and tear, gradual deterioration & lack of maintenance

Insurers expect the building to be reasonably maintained. Most policies exclude:

1. Wear and tear, corrosion, rust, rot
2. Gradual deterioration (e.g. long-term damp due to poor ventilation)
3. Damage caused by defective design or materials
4. Damage that happens over a long period and could reasonably have been prevented

Example:
If a roof has been leaking slowly for years and no one has addressed it, resulting rot might not be covered, even if a storm finally exposes the problem.

3. Defective workmanship or poor design

If damage arises solely because:

• A contractor did a poor job, or
• The building or a component was badly designed

Then the policy often won’t pay to fix the defect itself – although it may cover resulting damage.

For instance:

The faulty cladding itself might not be covered

But secondary fire damage to other parts of the structure could be, depending on wording and exclusions

4. Certain types of water damage

Escape of water is often covered – but with important caveats:

Common limitations:

• Higher excesses for escape of water claims
• Exclusions or restrictions where flats are unoccupied for more than a set period (e.g. 30 or 60 days) unless winterised or agreed
• No cover for gradual leaks that have been ignored for a long time

So, a sudden burst pipe is one thing; a slow drip behind the bath for two years is another.

5. Flood in high-risk areas (sometimes restricted)

Flood is usually included, but:

In high-risk flood zones, premiums may be higher

Some insurers may impose special terms, higher excesses, or refuse cover altogether unless extra measures are taken

For vulnerable locations, it’s essential to talk to a specialist broker who understands flood exposure for blocks of flats.

6. Subsidence (if not included or restricted)

Subsidence can be:

Included as standard

• Excluded because of previous history or ground conditions
• Covered with a high excess (e.g. £1,000 or more per claim)
• Tree roots, clay soil and poor foundations are common triggers.

Always check:

Is subsidence included?

What’s the excess?

Are there any special requirements (e.g. tree management)?

7. Deliberate or criminal acts by residents

Policies typically exclude loss or damage arising from:

• Deliberate acts by residents (e.g. intentionally starting a fire)
• Criminal activities (beyond what’s set out for theft by forcible entry in the wording)
• There may be nuances if, for example, arson is committed by a third party – but deliberate damage by someone with an insurable interest can be problematic.

8. Business activities inside flats (beyond what’s declared)

Many leases allow only residential use. Where business use is permitted:

• The insurer usually needs to know the nature of those activities
• High-risk business activities (e.g. storing flammables, heavy machinery, high footfall retail) may be excluded or need specific cover
• Running a small home office is different from turning a flat into a workshop or storage unit.

9. Contractual / financial disputes

Block of flats insurance is not a catch-all for:

• Disputes over service charges
• Arguments between leaseholders and the freeholder
• Non-payment of rent or service charges
• Breach of covenant disputes under the lease
• These are legal/contract issues – sometimes supported by separate legal expenses cover, but not by the basic property policy itself.

Common grey areas and misconceptions:

“The leak came from another flat – so their insurer pays, right?”

Not automatically.

The block policy often pays for damage to the building (ceilings, walls, communal areas).

The affected leaseholder’s contents policy pays for their belongings.

Recovery actions between insurers may happen in the background, but residents shouldn’t assume another flat owner is personally footing the bill.

“The block policy covers everything inside my flat.”

Usually not.

As a rule of thumb:

Block policy = structure and fixtures

Contents policy = moveable items and personal belongings

Leases sometimes define where the dividing line is (e.g. whether internal decorations and floor coverings fall under landlord or leaseholder responsibility), so it’s important to check both the policy and the lease.

“It’s empty at the moment, so the cover is the same, isn’t it?”

Not always.

Most policies have unoccupancy conditions, for example:

• Extra security requirements
• Turning off water and draining down systems
• Regular documented inspections

Ignoring these can be a fast route to claims being reduced or rejected, especially for escape of water, theft and vandalism.

How to make sure your blocks of flats insurance is water tight

Get the rebuild cost right
Use a professional valuation if possible, especially for older or unusual buildings. Underinsurance can lead to painful claim reductions.

Check who is actually responsible
Freeholder, head lessor, RTM company or residents’ management company – and make sure the policy schedule matches.

Read the exclusions and conditions
Especially for: unoccupancy, escape of water, subsidence, flat roof conditions and any risk-specific requirements.

Consider the extras you really need
Terrorism, D&O, legal expenses, engineering inspections – these can be crucial depending on the block’s size, location and governance.

Use a specialist broker
Block of flats insurance is not a standard household policy. A specialist who deals with freeholders, landlords and management companies daily can help avoid gaps.