Letting your holiday home commercially has many benefits, however as with running any business it isn't without risk. It is therefore important to get the right holiday home insurance cover. Many holiday home owners may unwittingly be relying on normal home insurance cover or even more disconcerting have no cover at all.
If you let your holiday home commercially for members of the public to take short term holidays, you should ensure that the insurer is aware; and that you do not fall foul of restricted cover when the property is not let. Look out for a policy providing cover in each of the following key areas:
Property Owners Liability: Without question the holiday home owner should be concerned about the substantial risks posed by third party liabilities. In this litigious society any one who owns a business can all too easily find themselves on the wrong side of a compensation claim that can seriously damage their wealth.
Make sure that your Holiday Home Insurance policy includes Property Owners Liability of at least £2,000,000 of cover. It is vital that you are covered in this way for injury to individuals, such as your tenants, visitors or guests and damage to their property. Most, if not all, holiday letting agencies will stipulate in their terms of business that you have this cover in place in order that they will act for you. If you manage the property yourself it is equally important that you have liability cover. However, that said, cover is no substitute for good risk management. It is therefore imperative that a full risk assessment of your holiday home and its garden is carried out and relevant safety legislation adhered to.
Employers Liability: As an owner of a UK holiday let you might think that Employer's Liability is unnecessary. However consider this; in the course of managing your holiday letting business you will more than likely employ, even if only on a casual basis, a cleaner, a gardener, a handyman, a painter and decorator, to name but a few. Therefore a quality holiday home insurance contract should provide Employer's Liability of £10,000,000 to cover death or injury claims in relation to anyone that you employ at your property.
Buildings Cover: You should not overlook the investment property itself - it is likely to be one of your major assets. To properly protect your holiday home property, you need to cover the buildings of your holiday home against all insurable risks for the full reinstatement cost, including any garages or outbuildings; fixtures and fittings; patios and driveways; garden walls, fences and swimming pools. You must not forget that you also need to include the cost of clearing the site in the event of complete destruction and the associated legal, architect and surveyor fees. Remember, the reinstatement cost is unlikely to be the same as the market value of the property or the price that you paid for it! If you under-insure your building you could fall victim to average being applied in the event of a claim. In a nutshell this means that, if your property is underinsured, your Holiday Home Insurance provider may not pay out the full amount of any claim, so it is important to work out the cost of replacement accurately and insure for the full amount.
