Landlords and agents are being urged to review their insurance policies to avoid unexpected claim rejections, warns Michael Sears, NAEA Propertymark Commercial Panel Board Member. Under the Insurance Act 2015, landlords are legally required to provide a fair presentation of risk to insurers — but many are falling short due to overlooked details, potentially leaving them without cover when they need it most.
Insurers tightening terms — landlords at risk
Landlords and tenants alike expect insurance claims to be settled promptly. However, insurers are increasingly scrutinising claims and looking for ways to impose exclusions — especially when policies haven’t been fully complied with.
Sears highlighted the importance of ensuring that tenants are aware of insurance requirements, stating: “If a commercial or residential tenant has not been given a copy of the insurance policy by the landlord or agent, they cannot conform with its conditions. Agents (being the professional) should ensure tenants receive a copy, otherwise they could be held in negligence by their client if the claim doesn’t pay out because the tenant has not complied with the insurer’s requirements due to not knowing about them.”
Sears stressed that landlords must “not fail to read your policy, especially its schedule” — as failure to meet even minor conditions can result in rejected claims. For instance, some insurers require a minimum indoor temperature of 15°C (58°F) for vacant properties during winter months or mandate regular inspections and waste removal every 30 days.
Checklist for landlords to stay compliant
To help landlords stay on top of their insurance obligations, Sears outlined a detailed checklist covering common insurer requirements:
- Policyholder details – Ensure all names match the property title and that business details, such as new directors or changes to operations, are updated.
- Security measures – Confirm that smoke and CO2 detectors are fitted, and that secure locks are installed.
- Tenant agreements – Assured shorthold tenancy agreements and ‘How to Rent’ guides must be provided to tenants.
- Occupancy changes – Inform insurers of any long periods of vacancy or tenancy changes.
- Fire safety compliance – Landlords must comply with the Regulatory Reform (Fire Safety) Order 2005 or equivalent laws in Scotland and Northern Ireland.
- Basement disclosure – If the property has a basement, it must be disclosed as these areas carry a higher flood risk.
- Flat roofs – Insurers often require flat roofs to be inspected regularly by a qualified professional.
- Contractor liability – Contractors working on a property must have the relevant professional indemnity (PI) and public liability (PL) insurance. Sears warned: “Defective work can mean a claim is withheld, at which point a contractor may stand to be sued.”
- Kitchen duct cleaning – In properties with commercial kitchens, fume extraction systems must be professionally cleaned at least once a year, with filters and traps cleaned every two weeks.
Landlords face tightening regulations and growing risks
The consequences of non-compliance can be severe. If a claim is rejected due to an overlooked policy condition, landlords may be left covering damages out of pocket — even if they had valid cover in place.
A landlord in Manchester recently faced a £40,000 repair bill after a fire broke out in a rental property. The insurance claim was rejected because the tenant had not been given a copy of the policy and therefore failed to comply with fire safety measures. The landlord admitted: “I assumed my agent had handled everything, but it turns out the tenant wasn’t even aware of the fire safety requirements.”
Sears emphasised that landlords should regularly review their policies — not just at renewal time. “Changes can be made yearly, not just during renewal. If you’re unsure about what constitutes a material fact, ask your insurer.”
For property investors, staying on top of insurance obligations could mean the difference between a successful claim and a financial disaster. With insurers tightening their terms and the rental market becoming more complex, proactive management of insurance policies is no longer optional — it’s essential.
