RTM Company Insurance
When a Right to Manage company takes over a block, it inherits the insuring obligation — and a set of liabilities the directors did not have as ordinary leaseholders.
Reviewed by the Landlord Quote editorial team · Last updated 14 September 2026
In short
- The RTM company becomes responsible for the block buildings policy on the acquisition date.
- The freeholder's interest and any lenders should be noted on the new policy.
- Directors' and officers' cover protects volunteer directors personally.
- Lifts and pressurised plant need statutory engineering inspection, usually arranged alongside the policy.
- Continuity matters: get the outgoing claims history before the changeover.
Does an RTM company arrange the buildings insurance?
Yes. Once the Right to Manage acquisition date passes, the RTM company takes over the insuring function from the freeholder and arranges the buildings policy for the whole block.
The Commonhold and Leasehold Reform Act 2002 transfers management functions — including insurance — to the RTM company. The freeholder keeps ownership of the building but no longer arranges or controls the policy.
That makes the RTM company the policyholder. Claims are made by the company, the premium is paid by the company, and the cost is then recovered from the leaseholders through the service charge in the proportions set by the leases.
Things to consider
- Note the freeholder as an interested party so their ownership interest is recognised in a claim settlement.
- Note mortgage lenders where the leases or lenders require it.
- Check whether the lease specifies particular perils or a particular basis of settlement.
Read next: Who insures a block of flats · Blocks of flats insurance guide
What insurance does an RTM company need?
A block buildings policy covering the full rebuild cost, property owners' liability, and — because the directors are personally exposed — directors' and officers' cover. Blocks with lifts, boilers or pressure systems also need engineering inspection cover.
The buildings section is the core: structure, communal areas, shared plant, and the flats themselves to the extent the lease requires. Loss of rent and alternative accommodation are normally included so leaseholders can be rehoused after an insured loss.
Property owners' liability responds to injury or damage claims from leaseholders, visitors, contractors and the public — a trip on a communal stairwell, a tile falling from the roof, a slip in the car park. Limits of £5m or £10m are common in blocks.
Directors' and officers' cover matters more than most volunteer directors expect. RTM directors make decisions about service charges, major works and contractor selection, and can face personal claims if those decisions are challenged.
Engineering inspection is a statutory matter rather than an optional extra. Lifts, lifting equipment and pressure systems must be examined at set intervals by a competent person, and insurers routinely arrange this alongside the policy.
Read next: Communal areas and property owners' liability · RMC buildings insurance
What information will an insurer ask an RTM company for?
The rebuild sum insured, number and type of units, year built, construction and roof materials, fire risk assessment, cladding and external wall position, details of any lift or communal plant, and a three to five year claims history.
The claims history is the item most often missing at changeover, because it sits with the outgoing broker or managing agent. Ask for it in writing as soon as the claim notice is served — insurers will normally price on the assumption of the worst if experience cannot be evidenced.
Fire safety documentation carries a lot of weight. A current fire risk assessment, evidence that any actions have been closed out, and clarity on the external wall system will widen the number of insurers prepared to quote.
Things to consider
- Buildings of 11 metres or more attract detailed external wall questions; 18 metres or seven storeys brings Building Safety Regulator duties.
- Keep the rebuild valuation current — a professional reinstatement cost assessment is typically revisited every three years and index-linked between times.
- Disclose known defects, ongoing works and any planned remediation programme.
Read next: Rebuild cost for a block of flats · What drives block insurance cost
Can an RTM company be refused block insurance?
A mainstream insurer may decline, but a decline by one insurer does not mean the block is uninsurable. Blocks with cladding, heavy escape-of-water claims, flat roofs, timber frame or ongoing remediation are routinely placed by specialist insurers through brokers who hold the right agencies.
Mainstream personal-lines comparison sites do not underwrite blocks at all — a block is a commercial risk. When a block is described as 'hard to insure' it usually means it has been presented to the wrong market rather than that no market exists.
Presentation matters. A complete submission with a current valuation, fire risk assessment, EWS1 where relevant, a dated remediation plan and a clean explanation of past claims will reach more underwriters than a partial one.
Read next: Working with a specialist block broker
More questions
Who pays the RTM company's insurance premium?
The leaseholders, through the service charge, in the proportions their leases set out. The RTM company pays the insurer and recovers the cost.
Does the freeholder still need their own insurance after RTM?
The freeholder no longer arranges the block buildings policy, but may still carry cover for their own residual interests. Their interest in the building should be noted on the RTM company's policy.
Beyond Leads Ltd T/A Landlord Quote (FCA FRN 940006) is an FCA authorised lead generation business. We do not provide insurance advice, recommend policies, arrange cover or quote premiums. This page is general information only. If your enquiry is matched, your details are shared with an FCA authorised specialist broker who will discuss cover and pricing with you directly.