It depends on your specific needs. Because the extent and cover of the premiums vary, make sure you compare landlord insurance policies to get a deal that’s right for you. You might want to tailor a policy to meet your needs by including some or all of the following:
Landlord buildings insurance
Typically provides cover for loss or damage caused to the building itself and could provide a pay-out if your property is damaged due to fire or flood, for example. Some buildings insurance covers malicious damage caused by tenants.
Landlord contents insurance
Although tenants are responsible for ensuring they have contents insurance for their personal belongings, if you’ve provided a furnished property then landlord contents insurance will ensure your possessions are covered. You could also consider adding accidental damage cover, which would cover you for any spills, breaks or damages caused by your tenants. A more common solution, especially if you’re renting out flats, would be contents cover for communal areas, such as halls, receptions, stairs and landings. Many policies include this cover as standard and its limit can be tailored to your needs.
Loss of rent
Cover for loss of rent is often underestimated by landlords. If a building is destroyed by fire, for example, the income you were planning to generate from renting it is likely to stop. Loss of rent cover can keep you protected in situations like this, as long as you properly assessed the rebuilding period prior to taking out cover in the first place.
Consider loss of two years rent to take account of the unexpected, but remember the rebuilding cost for each property will depend on many factors, including its type, construction and location. You should read the lease carefully as it may also make specific requirements in this regard.
Property Owners Liability (Public Liability) insurance
If one of your tenants has an accident at your property, considers that you are responsible and decides to take legal action against you, public liability insurance will cover you for your legal defence costs and expenses, in addition to any damages that may be awarded. Liability claims can be very expensive, so many policies will give you at least a £1 million limit of cover for any one claim. You might like to consider a higher indemnity limit, in view of increasing court awards made in the most serious of situations. Options of £2 million, £5 million or higher are available.
Employers’ liability insurance
If you employ anyone directly under your supervision and control to work at your rental property, such as a cleaner or gardener, this would normally involve an employment contract (but could extend to also include volunteers under your control). As a result, you will be responsible by law for arranging employers’ liability insurance. This will cover you for legal defence costs and any awards made for accidental bodily injury, illness or disease caused to staff due to your negligence.