Insurance for Charities with Heritage or Listed Buildings
We are lucky in the UK to have a wide range of listed and heritage properties. These properties often have unique or unusual features or builds and therefore insurance is an important consideration for the charities that look after them. Often the constructions, design and usage of historic buildings makes them expensive to reinstate. Claims can not only be costly but also they can require more time to source the right building materials and skilled labour for reconstruction.
Major losses at heritage buildings do happen, even those sites that employ high levels of security and fire risk management may find themselves subject to catastrophic losses, such as the fire that engulfed Windsor Castle in 1992. Fire is not the only risk, significant buildings may be subject to the risks of terrorism as well as flooding risks. As such, terrorism insurance for historic buildings is an important consideration.
Listed Building Insurance for Charities
Building Insurance for Listed or Heritage Buildings – Cover for the fabric of the building. Ensuring the insurer is aware of the nature of construction, whether the building is listed and the current state of repair and usage of the property. A very important factor in organising heritage building insurance for your charity is ensuring that the sum insured is adequate. If the property is ‘under-insured’ it might lead to the condition of average being applied in a claim which would reduce the insurers obligation to meet any claim in full.
Depending on the profile of the historic building, it might be more appropriate to organise the insurance on a ‘first loss’ basis. This means that you are not insuring the full reinstatement of the building for your charity. this can be appropriate when a total loss would be an extremely unlikely event or the heritage value lost by such a loss might be irreplaceable.
Total reinstatement is essentially cover that seeks to indemnify the insured for the full loss. Int he case of heritage building insurance it means that the sum insured must be able to cover site clearance, planning and full reinstatement to the existing design quality.
Business Interruption – Some charities are reliant on their heritage building for their income. Equally, if you are responsible for a listed or historic site and have a disaster recovery plan, you might find that you need some costs to be insured in the event of a significant claim, perhaps temporary accommodation for example. A further consideration for charities with heritage sites is the length of a potential claim. Often, business interruption policies are written on the basis of providing cover for income and costs only for the first 12 months, this is often very important when considering heritage building insurance.
Engineering Cover – This insurance might be relevant if your heritage or listed property has mechanical plant. This might be a lift but equally could be boilers or other mechanical equipment.
Liability Insurance – If your charity is looking for heritage building insurance, we can arrange this independently or include in a combined policy the liability insurances (public, products and employer liability) appropriate for your group.
Contents Insurance – Often listed buildings have specific contents requirements too. These might be collections, expensive or rare furnishings, artwork or sculptures or more. For charities such as museums or art galleries or any that have extensive specialist contents, we often work with specialist insurers such as Hiscox Insurance or Ecclesiastical. Another consideration would be ‘contents in the open’ considering items that might be outdoors.
The Importance of ‘Getting a Valuation’
Insuring for the correct reinstatement value is an essential element of organising suitable heritage building insurance. The sum insured must include the costs of demolition and site clearance, temporary structures and works, legislative changes that give new obligations, fees and of course construction costs. Depending on location, material type and building design, the construction costs can vary significantly from the building value.
For your charity to gain peace of mind, a professional survey of your heritage property should be arranged from time to time.