Don't Get Caught Out Without the Right Insurance

With vigils held earlier today for the victims of Friday's horrific terror attack at London Bridge, our thoughts are with their families and friends. At Ringley, we are also acutely aware of the implications of the terrorism threat for property managers, their clients, and residents.

The RICS Service Charge Residential Code

In 2003, terrorism cover was replaced by full all-risks terrorism insurance through the government-backed Pool Re scheme. The London Lloyd's market also offers less comprehensive and cheaper policies. If the lease requires it, terrorism insurance should be included in the block's coverage, as recommended by the RICS Service Charge Residential Code.

Compliance with Lease and Mortgage Lenders Handbook

It is crucial for those arranging buildings insurance to ensure they comply with the terms of the lease and the Mortgage Lenders Handbook. If either document mandates all risks or explosion coverage, terrorism insurance must be in place. Non-compliance could put the building owner or, in self-managed blocks, the RMC directors at risk of personal liability.

London Bridge Event: Impact on Residents

The impact of terrorism is not only about direct attacks on homes but also on nearby incidents. Following the events at London Bridge, local residents were told they couldn't return home and had to find temporary accommodation. With Pool Re coverage, temporary accommodation costs would be covered. However, other policies may not pay out immediately, leaving residents to cover the costs until the incident is officially recognized as terrorism.

The Low Probability but Real Risk

Statistically, the chances of a residential block being targeted by terrorists are low—one in a million according to disaster experts. However, as apartment blocks increase across towns and cities, there is still the possibility that a building may be impacted.

Check Your Lease and Insurance Policy

It's vital to check both your lease and insurance policy to ensure you are covered and not inadvertently leaving residents unprotected or falling foul of the law.