Shared freehold buildings insurance has no managing agent behind it and no freeholder with a commercial interest in getting it right. The flat owners are the freeholders, and that is both the advantage and the problem: the policy is theirs to choose and theirs to forget. Most of what goes wrong in shared freehold buildings is a job nobody was given.
The jobs that have to be allocated
Renewing the policy on time. Commissioning a reinstatement assessment every few years. Collecting the contributions. Keeping the documents where the next owner can find them. Notifying the insurer of works, of a new leaseholder, of a letting. Each is small; together they are a role, and naming one person to hold it is the whole of making this work.
The sum insured, which drifts by default
With no agent and no professional freeholder, the figure gets index linked from whatever it was at conversion and never revisited. A professional reinstatement assessment resets it and typically costs a small fraction of one year's premium across the flats. It is the single best thing a shared freehold company can spend money on.
Cover the company itself needs
Property owners liability for the common parts. Employers liability if anybody is paid to clean or garden, which is compulsory. Directors and officers cover for the flat owners who volunteered to run the company, which protects them personally and is inexpensive. Engineering inspection if there is a lift, which is a statutory regime rather than a choice.
What happens when flats change hands
A buyer's conveyancer will ask for the policy, the schedule and evidence of the sum insured. A shared freehold that cannot produce them delays sales and invites price reductions. Keeping a single folder, digital is fine, with the policy, the last assessment and the accounts, saves every owner money at the point they sell.
Questions people ask about shared freehold buildings insurance
Who arranges insurance in a shared freehold?
The company the flat owners jointly own, or the owners jointly where there is no company. In practice, whoever is given the job.
How often should we revalue the building?
A professional reinstatement assessment every few years, with index linking between. It is the most valuable spend a small freehold company makes.
Do we need directors cover?
It protects the flat owners who volunteered to run the company against personal claims, and it is inexpensive.
What will a buyer's solicitor ask for?
The policy, the schedule, evidence of the sum insured and the accounts. Keeping them in one folder saves everybody money at sale.