Block of flats insurance is a single buildings policy for a whole residential block, usually bought by the freeholder or a residents' management company and paid for by leaseholders through the service charge. It covers the structure and common parts for their reinstatement value, plus the freeholder's liability to residents and visitors. Since 31 December 2023, FCA rules require brokers and insurers to treat leaseholders as customers of that policy and give them information about it, including how the broker is paid.
This guide is for freeholders, residents' management companies (RMCs), right to manage (RTM) companies and owners of small blocks. If you're a leaseholder letting one flat, see our guide to landlord insurance for a leasehold flat instead.
What block insurance usually covers
Buildings for the full reinstatement value of the block, including the structure, roof, common parts, and often the original fixtures inside each flat.
Common parts contents: carpets, lighting, furniture, door entry systems and lifts in shared areas.
Property owners' liability for injury or damage caused by the building or common parts.
Loss of rent or alternative accommodation for residents if flats become uninhabitable after an insured event.
Employers' liability, if the freeholder or RMC employs anyone, such as a caretaker or cleaner.
Terrorism cover, often available as an extension.
Engineering inspection for lifts and plant, which insurers may require separately.
Setting the reinstatement value
The sum insured should be the full cost of rebuilding the block, including demolition, professional fees and compliance with current building regulations. For a block, that's best done by a professional reinstatement valuation from a chartered surveyor, reviewed every few years and index-linked between valuations.
Underinsurance on a block affects every leaseholder. If the sum insured is too low, the insurer may reduce claims proportionately, and the shortfall falls on the freeholder or the leaseholders.
The FCA rules for leaseholders (since 31 December 2023)
The FCA introduced rules for insurance of multi-occupancy buildings, which took effect on 31 December 2023. In plain English:
Insurers and brokers must consider leaseholders' interests when designing, pricing and arranging the policy, even though the freeholder is the policyholder.
Leaseholders can ask for information about the policy, including the cover, the premium and how the broker is paid, including commission.
Firms must make sure their remuneration is consistent with acting in leaseholders' best interests.
For freeholders and RMCs, this means you should expect questions from leaseholders and be able to answer them. A transparent fee arrangement makes that easier. Meshed charges a flat 10% broker fee, disclosed up front, with no hidden commission or admin add-ons.
Directors' cover for RMCs and RTM companies
If leaseholders run the block through a company, the volunteer directors can face claims about decisions on repairs, service charges, contractors and compliance. Directors' and officers' (D&O) cover protects them personally. See our directors and officers insurance guide for how D&O works.
Building safety and fire
Fire risk assessment. The Regulatory Reform (Fire Safety) Order 2005 applies to the common parts of blocks of flats. The responsible person must have a suitable fire risk assessment.
Higher-risk buildings. Blocks of at least 18 metres or seven storeys with two or more residential units fall under the Building Safety Act 2022 regime, with registration and safety case duties. Insurers will ask about these.
External wall systems. Insurers may ask for information about cladding and external walls, such as an EWS1 form or a fire risk appraisal.
Expect insurers to ask detailed questions about construction, fire safety and maintenance. Clear answers help your options.
Questions to settle before renewal
When was the last reinstatement valuation, and is the sum insured index-linked?
Is the excess sensible, and how is it recovered from leaseholders under the leases?
Are flats that are let covered, and does the policy need to know about them?
Does it include loss of rent or alternative accommodation?
Is terrorism cover included or needed?
Is there employers' liability if you have staff?
Do RMC or RTM directors have D&O cover?
Can you explain the broker's remuneration to leaseholders if asked?
Small blocks and converted houses
A house converted into two to four flats, owned by one freeholder who may also own or let some of the flats, is a common setup. You still need a buildings policy for the whole property, and if you let flats yourself, landlord cover for your liability and contents. Mixed ownership needs careful description to the insurer.
How we can help
Block insurance placement depends on the building, its construction and its fire safety position. We'll check which insurers on our panel will write your block and come back with what's available. We won't promise cover before we've seen the details.
Claims in a block: who deals with what
When something goes wrong in a block, the managing agent or the residents' management company usually handles the claim on the block policy. It helps to agree in advance:
Who reports claims and how quickly. Most policies have notification conditions.
How the excess is paid. Some leases pass the excess to the leaseholder whose flat caused the damage; others pay it from the service charge.
How escape of water is handled. Repeated leaks are a common source of block claims and can affect renewal terms.
How leaseholders are told. Under the FCA rules for multi-occupancy buildings, leaseholders are entitled to information about the policy.
Who arranges repairs and approves contractors.
Leaseholders who let their flats should buy their own landlord cover for contents, liability and rent. See our guide to landlord insurance for leasehold flats.
Renewal timeline for a block policy
Start the renewal process well before the policy ends. A sensible order is: confirm the reinstatement value, gather the claims history and building safety information, review the cover and excesses with directors or the freeholder, then compare terms. Leaving it late narrows the options and can make it harder to explain changes to leaseholders. Record the decisions and the reasons, so you can show leaseholders how the policy was chosen.
Frequently asked questions
Who pays for block of flats insurance?
The freeholder or management company buys it, and the cost is usually recovered from leaseholders through the service charge, as set out in the leases.
Do leaseholders need their own buildings insurance?
Usually not, because the block policy covers the building. Leaseholders who let their flats need landlord contents and liability cover. Owner-occupiers need home contents cover.
Can leaseholders see the broker's commission?
Yes. Under FCA rules since 31 December 2023, leaseholders can request information about the policy, including the broker's remuneration.
How often should a block be revalued for insurance?
Many surveyors and insurers suggest a full reinstatement valuation every few years, with index-linking in between. Revalue after major works.
Does block insurance cover the inside of each flat?
It often covers the original fixtures and structure inside each flat, but not leaseholders' contents or improvements. The policy wording and leases decide.
Do RMC directors need insurance?
Volunteer directors can be personally exposed. D&O cover is worth considering for any RMC or RTM company.
Get your block reviewed
Send us your current block policy or renewal, with the latest reinstatement valuation if you have it, and we'll review it and come back with quotes from the insurers on our panel that will write it. Start here.
Meshed is a trading name of Mesh'd Limited, authorised and regulated by the Financial Conduct Authority (FRN 1033248). We charge a flat 10% broker fee. This guide is general information, not legal advice.
Vincent Liu
Co-founder & CTO
