Property owners insurance is the trade name for cover on a building held as an investment rather than lived in by the owner. It is the phrase insurers use across residential lets, commercial units, blocks of flats and mixed use buildings, which is why the same words turn up in quotes for very different properties. What matters is not the label but which of three things you are: a residential landlord, a commercial landlord, or a freeholder insuring a building somebody else occupies.
The three owners the product serves
The residential landlord lets a house or flat to tenants and needs buildings cover, loss of rent, property owners liability and usually accidental damage. The commercial landlord lets a shop, unit or office and needs the same structure with a different occupancy rating, longer void allowances and attention to what the lease makes each side responsible for. The freeholder of a block insures the structure and common parts for leaseholders who pay for it through the service charge, which brings duties about what is insured and what is disclosed to them.
What property owners liability is doing in the name
Every version of this product carries liability cover for injury or damage arising from the building itself, and that section is the reason the cover is bought even where the building is cheap to rebuild. A slipped tile, a failed handrail, an unlit stairwell or an untreated icy path can each produce a claim from somebody who has never signed anything with you. It answers to tenants, their visitors, contractors and passers by alike.
Occupancy is the rating factor that dominates
Insurers price this cover on who is in the building far more than on what the building is. A professional tenant in a house, a student let, a tenant on housing benefit, a licensed HMO, a restaurant on the ground floor or a vacant unit will each produce a different premium and a different set of conditions, and some insurers decline occupancies others specialise in. Describing the occupancy accurately at inception is what keeps the policy answering.
Where it stops and another policy starts
Property owners insurance covers the building and your liability as its owner. It does not cover a tenant's stock or contents, a business you run from the property, a construction project on it beyond minor works, or the building while it is being extensively refurbished. Each of those needs its own cover, and a large refurbishment in particular usually needs the insurer's agreement before work starts.
Questions people ask about property owners insurance
Is property owners insurance the same as landlord insurance?
For a residential let they are the same product under two names. Property owners is the broader trade term and also covers commercial buildings, blocks and freehold interests.
Do I need it if the flat is leasehold?
Usually the freeholder insures the structure and recharges it through the service charge, and you insure your own contents, your liability and any loss of rent. Check the lease, because responsibility varies.
Does it cover an empty building?
Only for a limited period, after which cover narrows and the insurer must be told. Longer voids need unoccupied property cover with its own conditions about heating, water and inspections.
What sum insured should the building carry?
The cost of rebuilding it including fees and site clearance, not its market value. Underinsurance is dealt with by averaging the claim, which reduces every payment and not just the large ones.