D E Ford Insurance Brokers is Part of the PIB Group, as part of our response to the Coronavirus pandemic we have set up a dedicated microsite with advice on a range of insurance and business subjects, including information regarding if you find yourself in temporary financial difficulties, click here to visit the site.

Homeless Case Study

Homeless charities, like many other third sector organisations, invariably lease properties from a number of individuals and organisations (private landlords, housing associations, councils etc). In turn the charity will then provide accommodation for the people that they work with.

As part of an in-depth review for a charity we reviewed their lease obligations and those of their landlord(s). We found that no two leases were the same and the wordings used also varied widely. We identified varying degrees of ambiguity as to whether damage caused by the charity’s clients/residents was covered by the landlord and/or their insurer. This is important as, in a normal landlord/tenant relationship, it will fall to the tenant charity to make good damage that the landlord is not responsible for.

In simple terms the expectation will be that the premises are handed back to the landlord in the same condition as at the commencement of the lease.

Common issues

  • One issue which cropped up time and time again was damage caused to buildings by an uninsured risk (typically due to the landlord’s policy cover being too narrow in scope). This could have serious consequences and leave the tenant charity facing a potentially significant uninsured loss.
  • Another risk which we identified arose where the landlord did insure but their policy carries a large excess which on this occasion was passed on to the tenant charity. Again, this can expose tenant charities to significant levels of financial risk.
  • Ambiguity also becomes apparent where leases exclude damage resulting from client’s/resident’s acts (e.g. a fire or flood started by a client/service user). Clearly the consequences could be catastrophic if the claim was substantial and the tenant charity is again faced with potentially ruinous repair costs.

Solution

We recommended that charities have sight of all their landlord’s insurances to highlight potential exposures. This allows us to advise on areas of improvement or renegotiation.

The above are only a few of the key areas that require a charity’s careful consideration. D E Ford have a wealth of experience looking after homeless charities and other organisations operating in the social welfare sector.

 

 

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If you are making a general enquiry or do not know your service contact(s) please call 01904 784141or send an email to info@deford.co.uk

D E Ford Insurance Brokers is Part of the PIB Group, as part of our response to the Coronavirus pandemic we have set up a dedicated microsite with advice on a range of insurance and business subjects, including information regarding if you find yourself in temporary financial difficulties, click here to visit the site.

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