Insuring Historic Buildings
Obtaining adequate insurance is an important part in the risk management of almost all property. This is especially true of historic buildings as their design and construction can often make them vulnerable to damage, particularly if a backlog of repairs has developed over time.
The risks to older buildings
Fire has always been a risk to older buildings and continues to be a frequent cause of loss today, even to very significant historic buildings. Places of worship and vacant buildings can be vulnerable to theft and arson.
In recent years, the risks to property posed by storms, extreme rainfall and flooding have become more acute with the need for adaptation, adequate protection and insurance for both buildings and their contents.
How is insuring a historic building different?
The process of insuring historic buildings works on a similar basis to standard domestic, commercial and public property insurance, but there are certain issues that are peculiar to it.
Planning legislation, which may require reinstatement of damage on a like-for-like basis, can result in a more comprehensive level of insurance cover being required than might be needed for a property of standard modern construction. This may be the case where the building is listed, particularly if Grade II* or Grade I.
If the property is licensed for public use, or any purpose requiring public or employers’ liability, additional statutory duties will come into play. This makes the selection of adequate and appropriate insurance particularly important.
Historic England's guidance and how it can help
This guidance will help owners, managers, surveyors and other professional advisers involved with the insurance and assessment of reinstatement costs for historic buildings and other heritage assets.
The guidance stresses that insurance is just one part of a proper risk management strategy. For historic buildings, risk management must take account of potential loss from a lack of repair and maintenance, fire, theft, flooding and other more general and property specific risks.
The advice covers how to get insurance and determine the extent of cover required. It also details ways of establishing the appropriate level of reinstatement costs.
We have written it with larger more complex historic buildings in mind that would often have associated outbuildings or structures. Nonetheless, anyone wanting to understand the range of issues and risks involved with insuring any historic building will find it relevant.
Key issues to consider when insuring historic buildings
What is the extent of insurance cover needed?
- What needs insuring?
- Are there ancillary structures or special contents that you need to include?
- Do you need an insurance broker to look at different options?
What type of cover is needed?
- What type of policy would be best suited to the insurance cover required?
- What conditions and exclusions does the policy cover?
- What insured risks does the policy cover?
- Is there public access requiring public liability insurance?
- Are staff or volunteers involved with the property requiring employer’s liability insurance?
Assessing the reinstatement cost
- Does the ‘declared sum’ in the policy reflect the reinstatement cost assessment?
- Do you need professional help to assess reinstatement costs?
- Have you updated reinstatement costs every year?
- Maintenance and repair - continuous care will help to avoid major repairs and potential claims
- Fire - establish the risks and how these might be mitigated
- Flooding - establish the level of risk and what measures could be put in place to reduce potential damage
- Security - establish the risks and put measures in place
- Building works - consider the risks posed during building works
- Emergency planning - larger complex buildings and estates should have a plan in place