You do your best to get the most competitive insurance quote for your building and then a list of optional extras comes along, from terrorism to legal expenses cover.
It can all seem like too many decisions to make when all you want to do is make sure you have met the requirements of the lease and that the fabric of the building is covered.
However, as an active member of a residential management company or working with a managing agent, you will know that the workload involved in managing a block can seem almost never ending, and many of these “extras” are designed to help protect you and save you money down the line.
By negotiating terms for these policies based on blocks of flats, rather than big businesses, the rates for some of these additional covers can be surprisingly attractive, so do take a closer look before dismissing them. We recommend you take a look at legal expenses insurance for your management company.
Our Legal expenses insurance (LEI) is specifically designed for small businesses, which is what a residential management company is classified as in English law. It is not only about having the resources to defend yourself against action from other people, but also helps you to pursue your own grievances such as late payments.
After all, service charge income is the life blood of your block and you can probably ill-afford to let arrears mount up.
The legal expenses cover arranged by Deacon includes a Legal Helpline, where you can talk to specialist professionals and have access to a library of template documents and letters. Imagine the costs of that alone if you had to visit a high street solicitor.
If a dispute arises, then taking the right action early on can often help to defuse a situation. The Helpline can often give you the information needed to be able to do just that, potentially saving you hours of time and worry. And if the dispute escalates into a court case, the cover may pay the legal costs too.
You may have Directors & Officers liability cover in place, to help protect your directors as individuals, but legal expenses cover is different. It is for the legal entity – for example, the residential management company or right to manage company.
Complaints against contractors are a common form of dispute. If building or maintenance work starts to go wrong be sure to:
- contact the builder or decorator as soon as you know there’s a problem
- follow up phone conversations with a letter to confirm the problem, what you agreed the builder should do about it and by when
- agree a date to complete the work and set a final deadline. The builder or decorator may be busy, but they have breached their contract with you so they should carry out the remedial work as a priority
- make it clear that if they fail to meet the deadline you’ll get someone else to do it and you’ll be claiming back the cost from them
- check in with your legal helpline – if you haven’t already done so.
- obtain quotes or estimates that you’ve obtained from other builders so your contracted builder can see how much you’ll be claiming if they won’t put the problem right
- warn the builder that you’ll take them to court if necessary
- keep good records at all times!
Other extras to consider:
Engineering services: You’ll have to have key equipment like lifts and boilers and common electrical equipment inspected anyway to stay within the law, so cover that includes statutory inspection and breakdown repair work can should be considered.
Emergency Assistance: In a block of flats, emergencies in one flat can soon start to affect other people’s homes. Plan ahead and make sure everyone knows who to call in an emergency.
Terrorism: This specialist cover might be a requirement under the terms of your lease. Do check.
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited trading as Deacon accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.