Freeholder Building Insurance
Freeholder building insurance is a specialist buildings policy for the owner of a freehold building. It commonly covers the structure, roof, communal areas, property owners' liability and loss of rent, subject to the insurer's terms. For blocks of flats, the lease normally states whether the freeholder, an RMC or an RTM company must arrange the policy, with the cost often recovered from leaseholders through the service charge.
Landlord Quote is an insurance introducer that connects UK freeholders, RMCs, RTM companies and managing agents with FCA-authorised specialist brokers; it does not provide insurance advice or underwrite policies.
Last reviewed: 29 September 2026 by the Landlord Quote editorial team.
What is freeholder building insurance?
Freeholder building insurance is a buildings policy arranged by, or on behalf of, the owner of a freehold building that is occupied by other people. It is designed for buildings in multiple occupation — converted houses split into flats, purpose-built blocks, mixed residential and commercial premises — rather than a single owner-occupied home.
Standard household buildings policies are not generally written for buildings let to tenants or divided into leasehold flats, which is why freeholders usually place cover through a specialist market.
Who needs freeholder building insurance?
Anyone with a contractual or practical duty to insure a freehold building may need this type of policy. That commonly includes individual freeholders, freehold investment companies, resident management companies (RMCs), Right to Manage (RTM) companies, share-of-freehold groups and managing agents placing cover on an owner's behalf.
- Freeholders of blocks of flats and converted properties
- RMC and RTM company directors
- Share-of-freehold owners insuring jointly
- Managing agents placing cover for a client
- Owners of mixed-use buildings with flats above commercial units
Who arranges buildings insurance: the freeholder, RMC or RTM company?
The lease decides. In most long residential leases the freeholder arranges the policy for the whole building. Where a resident management company holds that obligation under the lease, the RMC arranges it. Where leaseholders have acquired the right to manage under the Commonhold and Leasehold Reform Act 2002, the RTM company normally takes on the insurance duty instead.
Leaseholders usually remain responsible for their own contents and internal improvements, and a leaseholder letting their flat will often consider a separate landlord policy.
What does a freeholder buildings policy usually cover?
Cover varies between insurers and is set out in the policy wording. Freeholder policies commonly include:
- Buildings cover on a reinstatement basis, including roof and structure
- Communal areas, communal contents and shared plant
- Property owners' liability
- Loss of rent and alternative accommodation following an insured event
- Trace and access for escape-of-water incidents
- Optional terrorism, legal expenses, engineering inspection and directors' and officers' cover
What is not normally covered?
Exclusions differ by insurer, but policies of this type commonly exclude:
- Leaseholders' own contents and possessions
- Wear and tear, gradual deterioration and lack of maintenance
- Damage arising while a building is unoccupied beyond the period stated in the policy
- Known or existing defects disclosed before inception
- Cladding or fire-safety remediation works, which are typically handled separately
How is the rebuild value calculated?
The sum insured is normally the cost of rebuilding the property, not what it would sell for. A rebuild assessment usually includes demolition and debris removal, professional fees, materials, labour, compliance with current building regulations and VAT where applicable.
Rebuild figures are commonly produced from a surveyor's reinstatement cost assessment or from BCIS rebuild cost data published by RICS. If the sum insured is too low, an insurer may reduce a claim payment proportionately.
Can the insurance premium be recovered through the service charge?
In most leases, yes — the cost of insuring the building is a service charge item. Service charges must be reasonably incurred under the Landlord and Tenant Act 1985, and leaseholders can ask for a summary of the insurance cover.
Since the FCA's multi-occupancy leasehold rules took effect (31 December 2023 for insurers, 31 March 2024 for brokers, freeholders and managing agents), leaseholders are treated as customers of the policy and are entitled to policy and remuneration information.
What information is needed for a quote?
To start an enquiry you only need the building address, the type of building and when cover is needed. To produce a quotation, an FCA-authorised broker will usually ask for:
- Number of flats or units and their use
- Construction type, age, roof type and number of storeys
- Rebuild sum insured or a reinstatement cost assessment
- Occupancy — private lets, social housing, students, short lets or vacant units
- Claims history, usually for the last three to five years
- Any cladding, listed status or non-standard features
Freeholder building insurance for mixed-use property
Mixed-use buildings — typically a shop, office or restaurant on the ground floor with flats above — are rated differently from wholly residential blocks because the commercial trade affects the risk. Insurers will usually want to know the trade below, whether there is cooking on the premises, and how the residential and commercial parts are separated.
Many standard block insurers decline mixed-use risks, so these buildings are often placed through specialist property owners' markets.
Who insures a freehold building?
| Who | Typical insurance duty | What to check |
|---|---|---|
| Individual freeholder or freehold company | Usually arranges buildings insurance for the whole building where the lease requires it. | The lease insuring covenant, rebuild sum insured and FCA disclosure duties to leaseholders. |
| Joint freeholders / share of freehold | The joint owners usually insure the building together under one policy. | Who is named on the policy, how costs are split, and that every co-owner's interest is noted. |
| Resident management company (RMC) | Often named in the lease as the party that insures and manages the building. | Directors' and officers' cover and whether the freeholder's interest is noted on the policy. |
| Right to Manage (RTM) company | Normally takes over the insurance duty from the freeholder once RTM is acquired. | The acquisition date, a handover of existing policy details and D&O cover for directors. |
| Commercial or mixed-use freeholder | Insures the building including commercial units, subject to lease terms with each tenant. | Each commercial trade, any vacant units and whether flats above shops are declared. |
| Managing agent | Places or renews cover on the owner's behalf rather than owning the duty itself. | Commission disclosure to leaseholders under the FCA multi-occupancy rules. |
Freeholder building insurance FAQs
What is freeholder building insurance?
Freeholder building insurance is a specialist buildings policy arranged for the owner of a freehold building. Policies commonly cover the structure, roof, communal areas, property owners' liability and loss of rent. Cover, limits and terms are set by the insurer and confirmed by an FCA-authorised broker.
Is the freeholder responsible for buildings insurance?
In most long residential leases the freeholder is contractually responsible for arranging buildings insurance for the whole building, with the cost normally recovered from leaseholders through the service charge. The lease determines the position in each case.
Who arranges the insurance after residents form an RTM company?
Where a Right to Manage company has acquired the management functions under the Commonhold and Leasehold Reform Act 2002, the RTM company normally takes over the duty to arrange buildings insurance from the freeholder.
Can a freeholder charge buildings insurance through the service charge?
Most leases allow the cost of buildings insurance to be recovered through the service charge. Service charges must be reasonable under the Landlord and Tenant Act 1985, and the FCA's multi-occupancy rules require policy and remuneration information to be shared with leaseholders.
How is the rebuild value calculated?
Buildings sums insured are normally set on reinstatement (rebuild) cost rather than market value, and typically include labour, materials, professional fees, debris removal and VAT. Rebuild assessments are commonly prepared using a surveyor's valuation or BCIS rebuild cost data.
What information is needed for an enquiry?
Usually the building address, the type of building, the number of units, and when cover is needed. A broker will then ask about construction, rebuild sum insured, occupancy and claims history.
Does Landlord Quote provide quotes?
No. Landlord Quote is a trading style of Beyond Leads Ltd (FCA FRN 940006), an FCA authorised lead generation business. It does not give advice, arrange cover or quote premiums. Enquiries are passed to FCA-authorised specialist brokers.
Does freeholder building insurance cover commercial units in a mixed-use building?
Specialist freeholder policies can usually insure the whole of a mixed-use building, including shops, offices or other commercial units alongside flats. Insurers will want to know the trade of each commercial occupier, as some trades affect the terms available.
What happens if a freehold building is underinsured?
If the sum insured is lower than the true rebuild cost, many policies apply an 'average' clause, which reduces a claim payment in proportion to the shortfall. This is why sums insured are normally based on a rebuild cost assessment rather than market value.
Do leaseholders need their own buildings insurance if the freeholder insures the block?
Usually not for the structure, because the block policy arranged under the lease normally covers the building. Leaseholders generally still arrange their own contents insurance, and those who let their flat often look at landlord cover for contents, loss of rent and liability.
Can joint freeholders insure the building together?
Yes. Where a building has joint freeholders or is held on a share of freehold basis, the owners commonly arrange a single policy for the whole building, with each owner's interest noted and the cost shared as agreed between them or under the lease.
Does the policy cover empty flats or vacant commercial units?
Most policies restrict cover when part of a building is unoccupied beyond a set period, often 30 to 60 days, unless the insurer has been told. Conditions such as regular inspections or draining down water systems may apply.
Is terrorism cover included in freeholder building insurance?
Terrorism cover is often optional and added as an extension rather than included as standard. Some leases and mortgage lenders require it, so it is worth checking the lease before cover is placed.
Can a building with cladding or fire-safety issues still get insurance?
Often yes, but insurers will ask about external wall materials, any EWS1 form and remediation plans, and terms may be restricted. Specialist brokers are used to placing cover for buildings affected by the Building Safety Act.
Related guides
- freeholder block of flats insurance — enquiry page specifically for whole blocks of flats
- insurance duties of a freeholder — guide explaining responsibilities and cover
- the block of flats insurance guide — informational hub for block insurance
- who insures a block of flats — freeholder, RMC, RTM and share of freehold compared
- rebuild cost versus market value — how sums insured are set
- how block insurance is charged through the service charge — recovering the premium from leaseholders
Sources
Beyond Leads Ltd T/A Landlord Quote (FCA FRN 940006, company number 12497289, registered office 146 High Street, Billericay, Essex, CM12 9DF) is an FCA authorised lead generation business. It is not an insurer or an insurance broker. We do not provide insurance advice, recommend policies, arrange cover or quote premiums. If your enquiry is matched, your details are shared with an FCA-authorised specialist insurance broker who will discuss cover and pricing with you directly.