Do I need landlord insurance?: Everything you need to know about letting your first property

Whether you’ve invested in your first buy-to-let home or are interested in letting out a commercial property, you’ll need to understand the ins and outs of being a landlord. Having the right insurance policy in place, as well as understanding your rights and responsibilities as a landlord, can help you protect yourself financially while realising where you’re financially liable.

Choosing the right landlord insurance

The type of landlord insurance you need depends on whether you’re a residential or commercial landlord.

Residential landlord insurance

Being a residential landlord means you’ll have tenants that are living and potentially working remotely in your property. It will be their safe haven and home, which means you’ll be responsible for ensuring that the property is well-maintained and up to standard. Whether you’re the proud owner of an entire house you want to let out, or a block of flats that’ll give you multiple tenants in different properties, you must have the relevant insurance in place.

Comprehensive residential landlord insurance will keep you protected by including cover such as contents insurance, loss of rent insurance, public liability insurance, buildings insurance, and even legal expenses insurance. As a first-time landlord, you may not think you need some of these covers, but you’ll be glad you do should the need ever arise. For example, if a tragedy forces your tenants to leave your property, you’d miss out on the regular rent payments if you were uninsured. Holding a loss of rent insurance policy means you’ll be covered for this loss of income so you won’t be left out of pocket.

Commercial landlord insurance

 As a commercial landlord, you could be dealing with business owners from a wide range of industries. Whether you’re renting out your property for a restaurant, salon, retail outlet, or even a factory, you — and not the business owner — are responsible for plenty of aspects regarding the building. You’ll need to ensure that the building structure is maintained, with any noticeable damages fixed quickly and efficiently.

Holding the right commercial landlord insurance prevents you from footing the bill for any costly repairs or renovations that you may need to make. This policy needs to be far more comprehensive than residential landlord insurance due to the increased number of people likely to be in the property at any given time. This means there is a greater risk of injury to visitors to the premises, so a higher level of public liability cover will be required to account for this. Depending on the type of commercial property, risks like fire and theft may also be more likely compared to a residential property. The risk of fire in a café using cooking facilities is far higher than a residential property, for example, so this will need to be considered when securing coverage. These unique risks are why you need a dedicated commercial landlord insurance policy to cover you financially in such circumstances.

What covers do you need with your landlord insurance?

As a landlord, you’ll be responsible for the upkeep and maintenance of the entire property, as well as repairing any structural damages such as leaks and other plumbing issues. It’s generally best practice to fix these problems as quickly as possible in order to stop them from getting worse and potentially causing bigger, and more costly, damages.

Choosing a landlord insurance policy with all the coverage you need is crucial for keeping you financially protected following any accidents or emergencies. Many covers are common in both commercial and residential landlord insurance packages, including accidental damage, loss of rent, public liability, and legal expenses. These are some of the most important types of insurance that you should always make sure are included in your policy.

Buildings insurance

If anything happens to the physical structure of your building, you’ll need buildings insurance to pay out the cost of any damages. Fires, floods, and even freezing temperatures and other extreme weather conditions are just a few examples of circumstances that can have a devastating impact on your building. Without a good insurance policy, you could be left struggling to pay the price. In some cases, buildings insurance can extend to cover the cost of a complete rebuild of your property, so it’s definitely worth securing as a landlord.

What are the benefits of landlords building insurance cover?

• Covers the cost of minor repairs
• Covers the cost of larger renovations
• Can cover a complete rebuild of the property, if needed
• Protects you against the cost of repairing damages caused by tenants

Contents insurance

Everyone knows that furnishing a property is expensive, and it’s in your best interest to protect your own belongings as best as you can. In the event that anything you own inside the property is damaged, it may be down to you to pay for repairs and replacements — this could potentially cost you thousands of pounds. Holding contents insurance means you won’t need to worry about covering the costs of this, especially if you’re a landlord with multiple properties, in which case the costs could mount very quickly.

What are the benefits of landlords contents insurance cover?

• Protects against the cost of repairing or replacing your belongings
• Crucial for fully furnished residential properties

Property owners insurance

Perhaps the most crucial insurance policy for any landlord is property owners insurance. As well as protecting your investment against damage sustained, it also ensures you won’t have to foot the bill if a tenant or other third party takes legal action against you after an accident caused by the condition of your property. Without insurance, you would have to pay costly compensation and legal fees. This is relevant to both residential and commercial landlords.

What are the benefits of Landlords property owners insurance cover?

• Covers you against property damage
• Includes legal cover
• Includes third party damage

As a business owner, it’s crucial to stay informed about the latest trends and developments in the world of business insurance. Let Brisco Business be your source of knowledge.

Darragh Timlin

With over 25 years’ experience, Darragh is an expert in all things insurance. Starting his career in commercial property underwriting, Darragh has worked for a number of global insurers and is now Managing Director of Brisco Business, part of the wider Henry Seymour Group.

All articles by Darragh Timlin