Insurance cover for communal areas
One cover that is often forgotten is cover for communal areas.
With new developments of freehold/leasehold Commercial units there is often a joint responsibility via a management company to insure the common areas such as roadways, paths, underground services, gates, fences and boundary walls as well as street lighting, for example.
Whilst there is a legal requirement for the property owners to have public liability cover for injury to third parties, quite often the material damage aspect i.e. third party impact, storm, fly tipping etc to these areas is often forgotten. Therefore a building’s reinstatement sum insured should be included in the cover requested.
Subsequently, Stuart Reynolds, Senior Account Manager, says: “We often find that it can often be included within minimum premiums required for the public liability cover only.
The same goes for Residential developments where the facilities may simply be private roads but they can also extend to electric gates, street lighting and even communal play areas etc, the lease should tell you what is considered ‘Communal Estate’.”
Residential Property Owners looking after private residential developments and properties with communal areas such as internal roads, footpaths or shared green areas all require insuring the same way and can potentially expose them to a liability claim should an accident/injury occur.
It is commonplace for new residential developments to share common spaces and facilities. When purchasing a property which shares these characteristics it’s important to establish the liabilities so you can cover yourselves and other residents who are legally responsible in the event of a claim.
Not all insurers have an appetite to offer public liability for land and developments on its own, and the premium can be prohibitive unless purchased through a scheme arrangement.
Stuart continues: “We also strongly recommend that Directors and officers liability insurance cover (D&0) is also purchased for the management company that is formed which can cover the cost of compensation claims made against them by shareholders, investors, employees, regulators or third parties.
Directors and officers have specific duties, responsibilities and powers relating to their positions. If a director or officer of the company is found to have acted outside of their terms of reference, civil, criminal or regulatory proceedings can be brought against them.
Directors’ and officers’ liability insurance covers the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful defence.”
If you have any queries or would like to talk to Hazelton Mountford more about them, please do not hesitate to contact us.