Buildings Insurance

Within the Managing Agency industry, and the clients and customers that property managers act for, there are several ways that buildings insurance is arranged and placed.

Bruton Street does not profess to be brokers or intermediaries. Yet, Managing Agents do find themselves embroiled in the vagaries of Insurance Matters so they must be vigilant and understand the involvement they have or should have, depending on their standing. Whether this is purely introductory between our client and any given broker. Managing Agents are often the first point of contact for all matters relating to their client's building.

With Financial Conduct Authority (FCA) and DLUHC involvement changes are afoot, much of which is going through government and is a discussion piece in the property marketplace. Why the government should pick one area of insurance alone is a moot point.

Investors, developers and owners may often see Insurance as something they wish to have close control of and will place in the first instance and advise the Managing Agent. The largest Managing Agents will have departments that deal with buildings insurance and renewal and be suitably accredited and qualified to do so. SMEs will see building insurance as an important and major cost in any year, requiring close scrutiny.

Buildings insurance is often one of the larger expenditure items in any building’s Annual Service Charge Budget yet finds itself managed more by agents and owners than the client/customer who are named as the insured and have a role to play as they are both the end-user and responsible for paying their contribution towards the annual premium, in particular Resident Management Companies and their volunteer directors.

Insurance brokers and Managing Agents have benefitted from the commission attached to these policies and premiums. Something dealt with by The FCA and with tacit agreement from The Association of Residential Managing Agents (ARMA, now The Property Institute (TPI). As of 31st December 2023, further clarity is now required from insurance brokers and other intermediaries regarding what an annual premium is made up of. Transparency is key.

The insurance cover you have still requires careful and expert handling to make sure your building is properly insured and more importantly that the annual premium and costs attached meet with client and customers’ understanding and approval. 

There is a recent article in Flat Living and News on the Block that are worth referring to:

https://www.flat-living.co.uk/commission-disclosure-from-31st-december-2023/

https://www.newsontheblock.com/insurance/insurance-commissions-could-they-be-at-risk

What is important is that your building is properly insured, which includes the right declared value and building renewal figures as well as an understanding of what the premium is made up of. With insurance commissions being looked at closely the outcome may be a new way of being remunerated for reasonable and qualified involvement in such insurance matters. Watch this space over the coming months!   

For more information contact Steve@brutonstreet.co.uk