The Director's Cut - Buildings Insurance Procurement Checklist

Before speaking to any broker or insurer, review your lease carefully.

Confirm:

• Who is responsible for arranging the insurance (landlord, RMC, RTM company) 

• What risks must be insured (this is often prescribed) 

• Whether terrorism insurance is required (may not be explicitly required in the lease but arguably necessary after Qdime [2014]) 

• How the premium is recovered from leaseholders 

• How uninsured excesses are to be allocated 

If the lease is unclear or inconsistent across flats, flag this early with your managing agent, solicitor or broker.

2. Confirm who is procuring the insurance

Be clear about who is actually handling the placement:

• Managing agent 

• RMC/RTM directors directly 

• Broker instructed by the board 

If a managing agent is involved, check whether they are authorised or exempt under the Financial Conduct Authority regime. If in doubt, search the Financial Conduct Authority Register using their legal name.

If they are not regulated, understand the basis on which they are acting.

3. Instruct a suitable broker (don’t skip this)

Buildings insurance for blocks of flats is a specialist area. Most insurers will not deal directly with leaseholders or directors.

When selecting a broker:

• Look for demonstrable experience in blocks of flats (e.g. do they have their own policy wording)

• Ask how many blocks they place cover for 

• Check whether they are directly authorised by the FCA 

• Ask how they are remunerated (commission, fee, or both) 

Transparency here is essential.

4. Obtain an accurate rebuild cost

Commission a reinstatement cost assessment (RCA) if one is not recent.

• Major RCA review recommended every 3 years (involving a site inspection)

• Desktop reviews acceptable in intervening years (if based on a prior inspection) 

Avoid relying on outdated or guesswork figures – this directly impacts your premium and risk exposure.

5. Gather the key information your broker will need

Your broker will need accurate, structured information. Expect to provide:

• Full property details (address, construction type, number of units, height) 

• Declared value (rebuild cost, as ascertained by an RCA)

• Claims history (usually 3–5 years) 

• Details of any major works planned or underway 

• Fire safety status and any known defects 

• Occupancy profile (owner-occupied vs let vs vacant) 

Incomplete or inaccurate data will either increase your premium or jeopardise cover.

6. Be honest about risk (especially fire and water)

Do not downplay known issues.

If your building has:

• Ongoing escape of water problems 

• Fire safety deficiencies 

• Cladding or compartmentation concerns 

These must be disclosed. Failure to do so could result in a claim being rejected or the policy being voided.

7. Review the quotations properly

Do not compare premiums in isolation. Interrogate each quote.

Focus on:

• Policy wording (not just the schedule) 

• Unoccupancy conditions (common area of weakness) 

• Escape of water excess levels 

• Sub-limits and exclusions 

• Any endorsements or special conditions 

If one quote is significantly cheaper, ask why.

8. Understand commissions and/or fees

Ask your broker (and managing agent, if applicable):

• What is the total commission included in the premium? 

• Is any of that shared with the managing agent? 

• Are there additional fees being charged? 

With reforms following the Leasehold and Freehold Reform Act 2024, transparency in remuneration is becoming standard. You should expect clear answers.

9. Scrutinise the excess structure

Excesses can materially affect both risk and cost.

Check:

• Standard excess levels (e.g. £500, £1,000, etc.) 

• Escape of water excess (often much higher) 

• Whether excesses apply per flat or per claim event 

• How the lease allocates responsibility for payment 

A lower premium with a very high excess is not always better value.

10. Confirm the full insurance programme

Ensure all required covers are in place:

• Buildings insurance (core cover) 

• Terrorism insurance (often lender-driven) 

• Directors’ & Officers’ (D&O) insurance 

• Engineering insurance (lifts, plant, pressure systems) 

Gaps here can expose directors and leaseholders to significant risk.

11. Document the decision-making process

As a director, you are making a fiduciary decision. 

Record:

• Quotes obtained 

• Key differences between options 

• Rationale for selection (not just price) 

• Advice received from broker/agent 

12. Communicate clearly with leaseholders

Once placed, provide leaseholders with:

• Summary of cover 

• Total premium and how it is apportioned 

• Key excesses 

• Any material changes from previous years 

13. Put a claims protocol in place

Agree in advance:

• Who reports claims (agent, director, managing agent) 

• Timescales for notification 

• How excess payments are handled 

• Who liaises with the loss adjuster 

Poor claims handling can undo good procurement.

14. Review annually (but don’t churn unnecessarily)

At each renewal:

• Update claims history 

• Reassess risk profile 

• Benchmark against the market (via your broker) 

Avoid switching insurers purely for marginal savings if it compromises cover quality or continuity.

15. Keep everything under review

Buildings insurance is not static. Monitor:

• Claims trends (especially escape of water) 

• Fire safety developments 

• Changes in occupancy 

• Market conditions (rates and capacity) 

Small proactive steps can materially improve your risk profile – and your premium.

A final thought

You do not need to become an insurance expert to get this right – but you do need to be structured, informed and willing to ask the right questions.

Handled properly, insurance procurement is not a dark art. It is a governance exercise – and if you would like a sounding board or a second opinion on your building’s insurance arrangements, feel free to get in touch.

About the Author

Jonathan Channing is an independent property management consultant working across the residential leasehold sector. A Fellow of The Property Institute (TPI), an Associate of RICS and an Honorary Consultant to the Federation of Private Residents’ Associations (FPRA), he also co-founded Proper Talk, the industry panel discussion series. Jonathan serves as an RMC director for two residential developments himself and regularly supports RMCs, share of freeholders and RTM companies in sourcing, assessing and appointing managing agents – helping boards navigate the market, structure tenders and make informed governance decisions.