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Part 2 – Guide to Holiday Home Insurance – Employers Liability Insurance

Employers Liability Insurance

In Part 2 – Guide to Holiday Home Insurance – Employers Liability Insurance we look at the importance of protecting your holiday letting business employees. As an owner of a UK holiday let you might think that Employer’s Liability is unnecessary. However consider this; in the course of managing your holiday letting business you will more than likely employ, even if only on a casual basis, a cleaner, a gardener, a handyman, a painter and decorator, to name but a few. Therefore a quality holiday home insurance contract should provide Employer’s Liability of £10,000,000 to cover death or injury claims in relation to anyone that you employ at your property. Most employers are required by the law to insure against liability for injury or disease to their employees arising out of their employment. Find out more about the Employers’ Liability (Compulsory Insurance) Act 1969 

Check out the following posts which expand on Boshers Guide to Holiday Home Insurance or visit our Holiday Home Insurance page.

1. Guide to Holiday Home Insurance – Property Owners Liability Insurance

3. Guide to Holiday Home Insurance – Buildings Insurance

4. Guide to Holiday Home Insurance – Contents Insurance

5. Guide to Holiday Home Insurance – Loss Of Rental Income

6. Guide to Holiday Home Insurance – Legal Expenses

7. Guide to Holiday Home Insurance –  General Considerations

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Part 1 – Guide to Holiday Home Insurance – Property Owners Liability Insurance

Property Owners Liability Insurance

In Part 1 – Guide to Holiday Home Insurance – Property Owners Liability Insurance we look at the importance of liability insurance for holiday home and holiday cottage complex owners. Without question holiday home owners should be concerned about the substantial risks posed by third party liabilities. In this litigious society any one who owns a business can all too easily find themselves on the wrong side of a compensation claim that can seriously damage their wealth.

For this reason make sure that your Holiday Home Insurance policy includes Property Owners Liability of at least £3,000,000 of cover. If your property sleeps 8 or more people you may wish to consider increasing your cover to £5,000,000. It is vital that you are covered in this way for injury to individuals, such as your tenants, visitors or guests and damage to their property. Most, if not all, holiday letting agencies will stipulate in their terms of business that you have this cover in place in order that they will act for you. If you manage the property yourself it is equally important that you have liability cover. However, that said, cover is no substitute for good risk management. It is therefore imperative that a full risk assessment of your holiday home and its garden is carried out and relevant safety legislation adhered to. A common cause of holiday home insurance liability claims are those resulting from slips and trips resulting in a holiday cottage guest suffering an injury. Read our post limiting the risk of slips and trips in your holiday home.

Check out the following posts which expand on Boshers Guide to Holiday Home Insurance or visit our Holiday Home Insurance page.

2. Guide to Holiday Home Insurance – Employers Liability Insurance

3. Guide to Holiday Home Insurance – Buildings Insurance

4. Guide to Holiday Home Insurance – Contents Insurance

5. Guide to Holiday Home Insurance – Loss Of Rental Income

6. Guide to Holiday Home Insurance – Legal Expenses

7. Guide to Holiday Home Insurance –  General Considerations

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Guide to Holiday Home Insurance – Introduction

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Holiday Home Insurance

Guide to Holiday Home Insurance – Introduction. Letting your holiday home commercially has many benefits, however as with running any business it isn’t without risk. It is therefore important to get the right holiday home insurance cover. Many holiday home owners may unwittingly be relying on normal home insurance cover or even more disconcerting have no cover at all. To learn more read our Guide to Holiday Home Insurance – Introduction and associated blog posts. Insurance brokers like Boshers understand the demands and needs of owners of commercially let UK holiday homes. Boshers have negotiated a specialist holiday home insurance policy with a leading insurer, Ecclesiastical. If you let out your holiday home, you should ensure that the insurer is aware; and that you do not fall foul of restricted cover when the property is not let.

Look out for a policy providing cover in each of the following key areas:

  • Property Owners Liability
  • Employers Liability
  • Buildings Insurance
  • Contents Insurance
  • Loss Of Rental Income
  • Legal Expenses

Check out the following posts which expand on Boshers Guide to Holiday Home Insurance or visit our Holiday Home Insurance page.

1. Guide to Holiday Home Insurance – Property Owners Liability Insurance

2. Guide to Holiday Home Insurance – Employers Liability Insurance

3. Guide to Holiday Home Insurance – Buildings Insurance

4. Guide to Holiday Home Insurance – Contents Insurance

5. Guide to Holiday Home Insurance – Loss Of Rental Income

6. Guide to Holiday Home Insurance – Legal Expenses

7. Guide to Holiday Home Insurance –  General Considerations

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Holiday Home Insurance

Holiday Home Insurance A guide to calculating your Sums Insured

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Are you fully covered?

Holiday Home Insurance A guide to calculating your Sums Insured. Our holiday home insurance may give you peace of mind should the worst happen, however you’ll need to give us the correct buildings and contents sum insured so that we can ensure the right amount of cover is provided.

Why do I need to choose adequate Sums Insured?

It is important that your sums insured are sufficient to cover the cost of rebuilding, repairing or replacing your property, because the sums insured are the maximum amounts we will pay in the event of a claim for loss or damage.

What happens if I am underinsured?

Selecting an inadequate sum insured may mean that you have to find part of the cost from your own savings or by borrowing. This guide is designed to help you as a furnished holiday let owner arrive at proper sums insured for:

  • The Buildings
  • The Contents
  • Loss of Rental Income

Underinsurance

It is important not to underinsure your property for the following reason. “If the property insured at the commencement of any physical loss or damage to such property be collectively of greater value than such sum insured (adjusted for index linking) you will be considered as your own insurer for the difference and shall bear a rateable proportion of the loss accordingly”. This means that if you only insure for 50% of the reinstatement value of your property or contents you stand to have any claim payment reduced by a half. The guidance below will help you calculate the right figure.

Rebuilding Costs

Your holiday home buildings sum insured should represent the amount that you would have to pay to rebuild the property including statues, fountains and hot tubs permanently fixed into the ground, swimming pools, tennis courts, paths, drives, terraces, patios, walls, fences, hedges and gates, fixed aerials, satellite dishes, wind turbines, solar panels, yards, car parks, roads and storage tanks. In addition the following costs should be considered:

  1. reasonable architects’ surveyors’ consulting engineers’ and other professional fees
  2. the cost of complying with European Union legislation Local Authority Buildings Regulations or other statutory requirements up to 15% of the sum insured by the relevant item
  3. the cost of remaining debris demolition shoring-up or propping

Internally you will need to consider fixtures and fittings such as built in bedroom furniture, kitchens and bathrooms as well as redecoration.

The Association of British Insurers’ (ABI) rebuilding cost calculator http://abi.bcis.co.uk/ is designed to help you assess the rebuilding cost of your property, if it falls within a range of standard house types. There is of course no substitute for instructing a professional Surveyor to prepare a Rebuilding Cost Assessment for insurance purposes.

Finding a Surveyor Professional advice can be obtained from a Chartered Surveyor: the RICS web site can be used to search for a Chartered Surveyor in your area.

Index linking

Your Holiday Home Insurance buildings sum insured may be index-linked (ie its adjusted according to inflation), however it is important that the sum insured was correct at outset and that it is increased to reflect improvements that you make to your holiday home property, such as adding an extension, conservatory or designer kitchen.

Contents Calculator

Your holiday home contents sum insured is the total value of replacing your holiday home contents with new items, should there be a total loss eg in the event of a fire. It’s important that your sum insured is correct so that Ecclesiastical can quickly pay any insurance claims you make.

The most effective way of working out your contents sum insured is to draw up an inventory of all the contents in your holiday home, room by room. Against each item write the replacement cost for a similar brand new item. In respect of books, works of art, television and audio visual equipment, unless agreed by us, a £1500 single article limit and £5000 any one property applies. Index linking may apply to the contents section of your Holiday Home Insurance policy, however it is important that you review your sums insured at renewal to take account of additional purchases and replacement costs.

Loss of rental income

Our Holiday Home Insurance Policy provides loss of rental income cover following an insured peril, which consequently renders the holiday home uninhabitable. As it may take some time to rebuild a holiday home levelled by fire or damaged by flooding; cover is provided for up to two years. As standard you will be insured for up to £75,000, however additional cover is available should your projected gross holiday letting income exceed £37,500 per year (£75,000 over two years).

What should you do now?

Once you have reviewed your sums insured, should you need to adjust your holiday home insurance policy cover or require any additional guidance please contact a member of our Holiday Home Insurance Team on 01237 429444.

All you need to know about our Holiday Home Insurance Policy can be found here.

Links

The Association of British Insurers (ABI) rebuilding cost calculator

http://abi.bcis.co.uk/

For further information on UK holiday home insurance visit the website page most relevant to you:

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Holiday Home Insurance

Holiday Home Insurance – Owners May Be Taking Unnecessary Risks!

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Letting your holiday home commercially has many benefits, however as with running any business it isn’t without risk. It is therefore important to get the right holiday home insurance cover. Many holiday home owners may unwittingly be relying on normal home insurance cover or even more disconcerting have no cover at all.

Insurance brokers like Boshers of www.boshers.co.uk/holiday-home-insurance/ understand the demands and needs of owners of commercially let UK holiday homes and have negotiated a specialist holiday home insurance policy with a leading insurer.

Holiday Home

Mark Lavington, a Director of Boshers Ltd, suggests, “If you let out your holiday home, you should ensure that the insurer is aware; and that you do not fall foul of restricted cover when the property is not let. Look out for a policy providing cover in each of the following key areas:

Property Owners Liability

Without question the holiday home owner should be concerned about the substantial risks posed by third party liabilities. In this litigious society any one who owns a business can all too easily find themselves on the wrong side of a compensation claim that can seriously damage their wealth. Make sure that your Holiday Home Insurance policy includes Property Owners Liability of at least £3m of cover and for larger properties sleeping 8 persons or more you may wish to consider increasing this to £5m. It is vital that you are covered in this way for injury to individuals, such as your tenants, visitors or guests and damage to their property. Most, if not all, holiday letting agencies will stipulate in their terms of business that you have this cover in place in order that they will act for you. If you manage the property yourself it is equally important that you have liability cover. However, that said, cover is no substitute for good risk management. It is therefore imperative that a full risk assessment of your holiday home and its garden is carried out and relevant safety legislation adhered to.

Employers Liability

As an owner of a UK holiday let you might think that Employer’s Liability is unnecessary. However consider this; in the course of managing your holiday letting business you will more than likely employ, even if only on a casual basis, a cleaner, a gardener, a handyman, a painter and decorator, to name but a few. Therefore a quality holiday home insurance contract should provide Employer’s Liability of £10m to cover death or injury claims in relation to anyone that you employ at your property.

Buildings Cover

You should not overlook the investment property itself – it is likely to be one of your major assets. To properly protect your holiday home property, you need to cover the buildings of your holiday home against all insurable risks for the full reinstatement cost, including any garages or outbuildings; fixtures and fittings; patios and driveways; garden walls, fences and swimming pools. You must not forget that you also need to include the cost of clearing the site in the event of complete destruction and the associated legal, architect and surveyor fees. Remember, the reinstatement cost is unlikely to be the same as the market value of the property or the price that you paid for it! If you under-insure your building you could fall victim to average being applied in the event of a claim. In a nutshell this means that, if your property is underinsured, your Holiday Home Insurance provider may not pay out the full amount of any claim, so it is important to work out the cost of replacement accurately and insure for the full amount.

You can get a good indication of your rebuilding costs by visiting the Association Of British Insurers (ABI) website and their building cost calculator for homeowners http://abi.bcis.co.uk. However the onus is on you to provide an adequate sum insured so you may be wise, particularly in the case that your holiday home is of non-standard construction, to have a professional insurance valuation carried out by a chartered building surveyor. If your Holiday Home is mortgaged, your lender will often specify as a result of their survey, the minimum buildings insurance sum insured they require.

Most insurers will index link the buildings sum insured so that you maintain an accurate insurance value over time, but of course this is dependent on you getting the right value in the first place.

It’s important to remember to get permission from your mortgage lender, your insurer and your landlord (in the case of a leasehold property) before you let your property for short-term holidays. This is very important as your insurance could be invalidated if you fail to do this.

Although your buildings policy usually includes theft or attempted theft; and damage by fire, lightning, explosion, earthquake, storm and flood; subsidence, heave and landslip; escape of water or oil, vehicle and animal Impact; aircraft and malicious damage; a quality Holiday Home Insurance policy should not restrict cover whilst the Holiday Home is let and will also extend to cover accidental damage.

Contents Insurance

The very nature of a holiday home is that it is a `home from home’ and therefore let on a fully furnished basis. In the past it was not unusual for the value of a typical holiday home contents to be relatively meagre. Latterly as people’s expectations have risen, as has competition within the holiday home market, it is has become the norm rather than the exception that an owner spend tens of thousands of pounds furnishing their holiday home. LCD and Plasma TV screens, surround sound home entertainment systems, hot tubs and expensive garden furniture are becoming increasingly more common. A policy that includes full accidental damage cover on a new for old basis will provide you with the peace of mind that your property is protected. The sum insured should be adequate to cover the replacement value of the contents in total.

It is advisable for owners to complete an inventory of contents together with photographic evidence and schedule of values in case of a total loss. A tip for photographing your audiovisual electrical equipment is to also take a shot of the serial number, which can aid identification and recovery in the event of theft.

Loss Of Rental Income

Your specialist Holiday Home Insurance policy should also provide loss of rental income cover for insured perils, which consequently render the holiday home uninhabitable. It may take up to two years to rebuild a property levelled by fire; you should therefore check that you are covered for sufficient loss of rental income for this period. After all, if you have a mortgage to pay or if you are relying on the income from your holiday home business to live on, loss of rental income cover will be invaluable.

Ensure you have a good understanding of your policy cover and in particular you understand your obligations regarding any warranties. You or an agent may need to inspect your property every 14 days whilst empty; or ensure that a minimum temperature is maintained during cold spells if the water is not turned off and drained. These are not only sensible procedures to reduce the risk of the potential for damage to your property but may also affect your ability to make a claim if not adhered to. Do check that you are still fully covered even if your property is vacant for long periods; some policies will reduce cover to a minimum or even exclude certain covers completely.

If your holiday letting is seasonal, you may have considered letting the property on a short hold tenancy agreement for six months. If this is your intention be sure to check that your Holiday Home Insurance policy allows for this.

For your own peace of mind check that your policy covers all of the above and remember that you only find out how good your broker and insurers are when you make a claim – so make sure that price is not your only deciding factor when selecting holiday home insurance. Compromising on cover to save money when insuring your holiday home is not an option – you wouldn’t take unnecessary risks, would you?

Boshers are Independent Insurance Intermediaries and have been arranging specialist holiday home insurance for owners of commercially let UK holiday homes since 1990. For further information and quotes visit www.boshers.co.uk/holiday-home-insurance/ or contact them on 01237 429444.

Boshers Ltd – Independent Insurance Advice

ABI / BCIS House Rebuilding Costs – Checking your Sum Insured Calculator

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