Overlooked Insurance Products
Belinda Thorpe, Managing Director of Residentsline, tells us what we need to know about these sometimes-overlooked insurance products.
There are a few areas of optional cover that some Residents’ Management Companies (RMCs) decide not to take out. Whilst this is cheaper, it is not always safe as it leaves RMCs without the protection they need.
Here is a brief summary of the most important insurance policies that shouldn’t be left out of your insurance.
Directors and Officers Liability Insurance
This valuable cover protects the Directors and Officers of an RMC, Residents’ Association or RTM Company against ‘Wrongful Acts’. These acts are defined as errors or omissions in the running of the management of the block of flats for which the RMC are responsible.
Directors and officers should be aware that they can be held personally liable for their acts, errors or omissions and that the law does not distinguish between the director or officer of an RMC, Residents’ Association or RTM Company and that of a major corporation. Surprisingly, some directors choose not to protect their personal wealth with a Directors and Officers Liability policy.
Recently, leaseholders of a block of flats successfully brought an action against the residents’ committee for failing to appoint a building company in a timely fashion to repair external brickwork on the building. Damage had been caused following a heavy rainstorm and reported to the Committee, however repair work had not been commenced several months later when a subsequent rainstorm caused further damage. The costs and legal charges resulting from damages awarded by the court and paid from RMC directors’ personal assets could have been avoided had the RMC taken out Directors and Officers Liability insurance.
It only takes a couple of minutes to obtain a quote…simply visit https://www.directorsandofficersliability.co.uk/.
Could your building be a target?
Whilst it will always be a difficult scenario to address, terrorism has been, and still is, a very real and unpredictable threat that we face. The MI5 terror threat level has fluctuated from critical to severe since 2014 and shows no signs of reducing in the near future. As such, it is important to protect yourself should the worst happen.
It is important to note that your standard Buildings Insurance policy very rarely includes the damage caused by terrorism. Damage of this kind must be covered by a Terrorism Insurance policy.
The Employers Liability (Compulsory Insurance) Regulations 2008 requires that Employers, for any Company with Directors and/or Employees (even if only one and unpaid) have Employers Liability Insurance. Failure to secure this cover could result in a fine of up to £2,500 per day for each day that cover is not in place. Most blocks of flats are managed by directors and either employ or have residents who provide cleaning, gardening or administration duties – make sure your RMC is protected.
What should you do if your owners want to opt out of certain covers you feel should be considered?
It is important that the leaseholders are made aware and accept that you, as directors, will not be held responsible for their decisions. A draft letter should be forwarded to each owner, along the following lines:
On [date], the leaseholders of XXX Ltd decided against effecting the following insurance covers:
- Employers Liability Insurance
- Terrorism Insurance
- Directors & Officers Liability
The leaseholders of XXX Ltd (list of whom are shown below) will not hold the shareholders/decision makers responsible for any losses that may be due to us not affecting these insurance policies.
Finally, make sure all the flat owners sign it.