Commercial holiday let - public liability insurance

Agencies and other headaches, keys and cleaners, running costs and contracts...in short, all the things we spend so much of our time doing behind the scenes.<br>
LazyPuffin
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Commercial holiday let - public liability insurance

Post by LazyPuffin »

I have a holiday let owned by Ltd Company X.
This will be managed by Ltd Company Y.

As far as I am aware I need public liability cover for Company Y, as it is this company that the tenant will have a contract with and, in theory, the one that the tenant would sue if something went wrong.

However, the insurers I have spoken with, will only insure the 'owner', Company X.

Anyone else sorted this one out ?
Joanna
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Post by Joanna »

As the owner I would have thought that you would want to have your own holiday let insurance, not just for public liability, but for all the other aspects of owning a holiday let that you'll be covered for. After all, you've invested much more in the property than any agent and have much more to lose if anything goes wrong.
Jo

Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
jafa
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Re: Commercial holiday let - public liability insurance

Post by jafa »

LazyPuffin wrote:I have a holiday let owned by Ltd Company X.
This will be managed by Ltd Company Y.

As far as I am aware I need public liability cover for Company Y, as it is this company that the tenant will have a contract with and, in theory, the one that the tenant would sue if something went wrong.

However, the insurers I have spoken with, will only insure the 'owner', Company X.

Anyone else sorted this one out ?
Depends what your looking to Insure. If its the property, then it would be in the name of Company X. The Ltd Comp Y requires Insurance as a management agent. So technically two policies are required covering different covers. You are obviously setting up two companies for a reason. So why do you think you can get away with just one policy? The two Companies are two Legally seperate entities.
Jafa
Joanna
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Post by Joanna »

Sorry - I misunderstood - is it that you have set up two limited companies yourself? One to own the property and a separate one to manage it?
Jo

Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
LazyPuffin
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Post by LazyPuffin »

Joanna wrote:Sorry - I misunderstood - is it that you have set up two limited companies yourself? One to own the property and a separate one to manage it?
Exactly that. To insulate the property owning company from potential litigation. The booking would be via the management company, unfortunately this then throws up the problem in the original post. It's looking as though it might be too much hassle. I'm thinking I might ditch the management company and just do the lets from the property co. The risk of significant litigation is low and manageable with the appropriate insurance in place.
Last edited by LazyPuffin on Tue Jun 22, 2021 12:31 pm, edited 1 time in total.
LazyPuffin
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Re: Commercial holiday let - public liability insurance

Post by LazyPuffin »

jafa wrote: Depends what your looking to Insure. If its the property, then it would be in the name of Company X. The Ltd Comp Y requires Insurance as a management agent. So technically two policies are required covering different covers. You are obviously setting up two companies for a reason. So why do you think you can get away with just one policy? The two Companies are two Legally seperate entities.
I'm wanting to insure against public liability as stated in the original post. Obtaining cover for the management company is the thing I am struggling to find as all insurers will only cover the property owning co. I'm aware of the legal standing of ltd companies.
LazyPuffin
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Post by LazyPuffin »

If folks use the likes of Sykes to manage their properties, do you carry your own public liability or does Sykes provide it?

It must be possible to get liability cover for a management co. however this is probably into 'specialist' insurance i.e. crazy expensive.

Just looking to structure my arrangements in the best way for the future.
Joanna
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Post by Joanna »

I think it's usually down to the owners to have the appropriate insurance in place. If someone has an accident at the property they'll claim against the owner. If they tried claiming against the agent then I imagine that the agent's insurance company would claim against the owner so either way it's the owner that needs to be insured.
Jo

Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
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CSE
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Post by CSE »

The whole idea sounds complicated for a "just in case" scenario.

I would have thought the owner is responsible for insuring the property.
The contract for letting ultimately with the owner of the let.

If you directly employ a management comapny would you not need to cover Employers' liability insurance as well?

To ensure you have a buffer against ligations undertake a thorough risk assessment. Review the assessment often. In addition purchase decent insurance cover.
Never try to out-stubborn your guests.
zebedee
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Post by zebedee »

+1

The agent is just that, someone acting on your behalf. You hold all the risk.

The same is true in residential letting. If say, the agent makes an error whilst taking and processing the deposit, it is still you who the courts hold to be accountable, not the agent.

You will need your own public liability insurance whether you have an agent or not.

The other thing is, you won’t keep your business if the property is poorly maintained as either no one will book it when they see photos, or reviews will be terrible, so no one will book it.

Of all the things to worry about with a holiday let, being sued is not in my top ten list.
LazyPuffin
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Post by LazyPuffin »

Thanks for the input folks.
The way it's looking is... owner has responsibility for the upkeep, maintenance and safety of the property and carries the ultimate liability - therefore carries the cover.
Agent is merely acting on the owners behalf.
zebedee
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Post by zebedee »

Yes, they are just booking agents (who take a fat fee).
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