When we purchase a buy-to-let property needing renovation, it’s easy to focus only on the speed of the project – time is money after all!
However, failing to make adequate provision for insurance could be a costly mistake!
Does Buy-To-Let Insurance make provision for renovation?
You should notify your Landlord Insurance provider before any works commencing with details of:
- How long you anticipate the property to be vacant
- Details of the type of work being undertaken
- Any required increase to rebuilding sum insured post completion of the works
Depending on the extent of the renovation, your insurer may impose additional conditions or warranties to your policy.
If this is the case, it is essential that you fully understand the implications and that you can abide by the terms applied – your Insurance advisor will be able to assist in reviewing these for you.
If the property is to be vacant for an extended period, your Landlords Policy may no longer be suitable, and it may be more favourable to purchase a specialist unoccupied property Insurance policy.
Will I need any other cover?
This depends on the nature of the renovation. Are you employing an overall contractor or running the project yourself?
Many Landlords have contacts across various trades and will opt to project manage, even quite complex, renovations themselves by employing the services of a variety of tradesmen for the different elements.
Employing the services of a main contractor
When you contract the renovation to a single contractor, be it an extension, or a bathroom and kitchen refit, your contract should make them responsible for all insurance requirements.
A particular area of note is who is responsible for the “works” which includes materials being delivered to site.
We’ve heard horror stories of properties being broken into and full kitchens, still in boxes, being stolen before installation, only for the Landlord to find that he was responsible under the contract and being left to find funds for a further replacement.
You should ensure that you obtain full details of their contractor's insurance before work commences including:
- Public Liability Insurance
- Employers Liability Insurance
- Contract Works / Contractors All Risks
Check with your Insurance Advisor in terms of suggested limits, we would recommend a minimum of at least £2,000,000 Indemnity for Public Liability Insurance. The contract works indemnity will usually be driven by the value of the contract itself.
Running the project yourself
If you fancy yourself as the next Sarah Beeny and feel confident enough to project manage your renovation, good on you!
However, this does increase the focus on your renovation insurance requirements. Your Landlord insurance advisor will be able to guide you through the process depending on your specific circumstance, but you should consider:
- Public Liability Insurance (If you are carrying out any work yourself or using direct employees)
- Employers Liability Insurance (If you are employing people directly rather than contracting different firms)
- Contract works / Contractors All Risks (Covering materials, hired in tools and plant which are required. Make sure you check policy terms and conditions carefully to ensure you meet specific requirements.)
TOP TIP – Make sure that your Contracts Works sum insured is adequate, this needs to include all materials (e.g. if you are paying for kitchens or bathrooms directly) as well as the sum of the contract values.
Checks should be made to all contractors you intend to use in terms of their Public Liability and Employers Liability Insurance policies, and you should retain copies of all the information carefully in case you need to pursue a claim.
Legal expenses is a good idea for any Landlord, but particularly if you are involved in renovation as disputes can often occur, but make sure your policy includes Contract Disputes cover.
When can I find information on contracts?
The Joint Contracts Tribunal is the most commonly used standard for building contracts, more detail is available from their website, and contract templates are available to download.
A series of more basic contractors’ contracts are also available free to download from the Federation of Master Builders.
If you need any specific legal advice, then we would always recommend you consult with a qualified solicitor.
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Insync also offers independent specialist advice on all area of Landlord Insurance, including renovation.
Why not book a free review with one of our insurance experts via our website at a time that suits YOUR diary.
Alternatively, call us on 0330 1240730 for more information, we would love to hear from you!