What Insurance do I Need as a Landlord in the UK?

Being a landlord can be extremely rewarding with a steady stream of income and the potential for future returns.

With the average private landlord owning between and 12 properties, there is a significant opportunity to create a profitable business now and in the future.

It’s therefore crucial to protect your investment and secure your financial future. Knowing what insurance you need as a landlord in the UK is key.

Is landlord insurance a legal requirement?

Landlord insurance isn’t a legal requirement, but it offers essential protection for landlords across a number of areas. It’s a sensible decision to protect your property investment.

While it’s not illegal to become a landlord without it, many mortgage lenon your buildings.

If you employ staff, it is a legal requirement that you arrange . This protects you if employees are accidentally injured while working for you and claim it was your fault.

Buildings and contents cover

You may think that a standard home insurance policy will be sufficient to cover the building and contents of your rental property. In reality this is not the case, and therefore if you are renting your property out you need a landlords insurance: policy as standard home buildings and contents insurance will not cover you.

Landlord buildings and contents cover protects both the building and the contents belonging to the landlord within it. The building covers:

• Walls
• Floors
• Structure
• Roof
• Outbuildings
• Kitchen
• Bathroom
• Drives within the property boundary

Having buildings cover in place can cover the cost of repairing or rebuilding your property if it’s damaged by fire, flood or vandalism.

You can include insurance to cover for contents of communal areas. This includes items such as the furniture, carpets and electrical items owned by the landlord for loss or damage caused by a range of specified perils such as fire, theft flood, storm etc.

Where you are letting the property on a furnished basis as a landlord you can arrange specialist cover in the case of events like fire, theft or flood.

However, landlord contents only covers items supplied and owned by the landlord. If the property is unfurnished and tenants provide their own contents, it is up to them to sort out tenants contents insurance.

A key difference between landlord buildings and contents insurance and regular buildings and contents insurance, is that it can be extended to include accidental and malicious damage by your tenants. No matter how hard you work as a landlord to vet your tenants, there may be a disagreement somewhere down the line and you can’t control how other people react. If they react by smashing a window or breaking a door for example, this could be covered as part of your landlord insurance.

It’s important to note that landlord insurance doesn’t cover your tenants’ contents. If your tenants want to insure the contents they bring with them, they need to buy their own contents insurance policy.

Loss of rent cover for landlords

Missing out on rent can be a financial disaster, especially if it stands across a number of months on multiple properties.

Landlord insurance can cover loss of rent depending on the cover you’ve chosen and the reason why you’re losing rent. Most insurers will cover you if your tenant has to move out of the property following a disaster like a fire or flood, if this disaster is covered by your landlord insurance. It’s not always a standard cover, so be sure to make your requirements clear. We can also include the additional costs of arranging alternative accommodation on your tenant’s behalf where they are still paying you rent.

When arranging this cover its important to consider how long any potential rebuild of your property can take so as to ensure you have adequate cover. Most policies will cover you for at least 18-24 , although this can go up to 36 months. Potential rent increases in this time and the money you would lose as a consequence can also be built into loss of rent cover.

Loss of rent cover often isn’t a standard part of your landlord insurance, so you’ll need to choose it as an add-on when you take out your policy.

Also consider loss of rent if your tenant has failed to or refuses to pay. This is specialist cover called rent guarantee or tenant default insurance, and you will not be covered under a standard building insurance policy.

Property owners’ liability

Accidents can always happen, so you need to be prepared for it. Property owners’ liability cover protects you if your tenant is injured or has an accident on the property which can be attributed to being your fault. Examples may include:

• Your tenant trips over a loose floorboard and injures themselves
• Slips on stairs due to poor lighting
• A faulty appliance causes a fire and damages your tenant’s belongings

With property owners’ liability cover you can take out policies from £1 million up to £5 million. This will cover you for legal defence costs and if you are found to be at fault will cover the damages awarded to your tenant up to the limit under your policy. It’s vital you have this in place.

Legal expenses cover for landlords

Unfortunately, the reality of being a landlord means that occasionally you may be involved in legal wranglings and court proceedings. Cover for legal expenses covers the costs associated with legal disputes, whether you or your tenant brought the claim. It will cover you for scenarios including evictions, violation of the lease agreement or late or withheld payments.

You should check the cover provided by your quotation. As sometimes this may be covered under a standard landlord insurance policy. More likely you will need to arrange landlords legal expenses insurance for an extra cost. It’s important to have this in place, to minimise costs if you need to make a claim.

Landlord unoccupied property insurance

If your property is going to be vacant for a while, unoccupied property insurance is a sensible option to cover fire. Most insurers will restrict the cover available and therefore if you want wider cover for theft and vandalism, damage caused by water and oil leaks, as well as natural disasters then you will need to ask us about specialist unoccupied property insurance which can include more cover for you.

Consider this type of cover if:

• You’re between tenants and there’s a significant time period where the property will be empty
• The property is new on the rental market and you’re looking for tenants
• You rent to students and are often between tenants over the summer holidays

Landlord insurance from Towergate

We provide landlord insurance for a wide range of properties and tenants including multi occupancy, students, local authority placements, unoccupied and much more.

See our landlord insurance page, get a landlords insurance quote online or call 0330 828 0108 for more information.

Claims can happen to anyone, no matter how well you manage your properties and run your business. Just like any business, it pays to protect yourself in the right way. We can’t stress the importance enough of having the right insurance in place to cover you for any potential circumstances and losses.

Commercial property insurance from Towergate

Explore our commercial property insurance options, covering a range of properties from our trusted network of insurers. Whether it's a single property or an entire portfolio, we've got you covered. Get a commercial property insurance quote, call us at 0330 828 0512, or request a call back at a convenient time.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has 20 years' experience as a residential landlord.

The information contained in this article is based on sources that we believe are reliable and should be understood as general information only. It is not intended to be taken as advice with respect to any specific or individual situation and cannot be relied upon as such.