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  • Insuring a Commercial Property Portfolio as You Scale Up

    Commercial property portfolio insurance lets you insure several properties under one policy, with one renewal date and a single schedule listing each building. As your portfolio grows, it can replace a collection of individual policies that are time-consuming to manage and easy to let slip. The key is keeping the schedule accurate as you add, change and remove properties.

    Most landlords start with one property and one policy. By the time they own five, ten or twenty buildings, often a mix of residential and commercial properties, they may have just as many policies with different insurers, terms and renewal dates. That is often the stage at which bringing them under one commercial property insurance arrangement is worth considering.

    This guide explains how property portfolio insurance works, when it is worth moving to, and what to keep on top of as you scale up.

    Key Takeaways

    • A property portfolio insurance policy covers multiple properties under one policy, with a schedule setting out the cover for each building.
    • One renewal date and one set of policy terms make a growing portfolio easier to manage, but a portfolio policy isn't automatically cheaper.
    • Tell your insurer or broker before you buy, sell or change the use of a property. Under the Insurance Act 2015 and your policy conditions, these changes may need to be disclosed.
    • Check that rebuilding costs, rental income and policy limits are right for each property, not just the portfolio as a whole.
    • Unoccupied properties, mixed-use properties and industrial units can each change the risk profile and may need specific terms.
    • Legal duties such as employers liability, fire safety and gas safety grow with the size and mix of your portfolio.

    What Is Commercial Property Portfolio Insurance?

    Commercial property portfolio insurance is a single policy that covers several properties owned by the same person, partnership or company, or by related companies named on the policy. If you buy through separate companies, make sure each owning company is named as an insured.

    A portfolio policy can usually include residential or commercial properties, or a mix of both. That might include shops with flats above, offices, industrial units, blocks of flats and individual buy-to-let homes. Some landlords call this multi property landlord insurance, and the principle is the same: one policy, one renewal date, and one insurer to deal with if something goes wrong.

    When Separate Policies Stop Working

    Individual policies work well for one property, or perhaps two. As a portfolio grows, the problems tend to build up:

    • Several renewal dates. Each renewal needs checking, and it is easy to miss one.
    • Inconsistent cover. Different insurers offer different covers, excesses and conditions, so one property may be well protected while another has gaps.
    • More administration. Multiple policies mean more paperwork, more payments and more contacts.
    • Harder claims. If an incident affects several properties, or a shared building, dealing with more than one insurer can slow the claims process.

    If you're spending more time managing insurance than reviewing it, bringing your properties under one commercial property portfolio insurance policy may be worth considering.

    One Policy or Individual Policies?

    A portfolio policy brings real benefits, but it isn't right for every landlord or every property.

    The Advantages

    • One renewal date for the whole portfolio.
    • Consistent policy terms across properties.
    • A single schedule that shows the cover for each building at a glance.
    • Easier to add and remove properties as the portfolio changes.
    • One point of contact when you need to make a claim.

    The Limitations

    • A portfolio policy isn't always cheaper than individual policies. Premiums depend on the properties, not just the number of them.
    • Some properties may fall outside an insurer's appetite, such as long-term unoccupied buildings or certain higher-risk commercial uses, and need separate insurance.
    • If the schedule isn't kept up to date, errors can affect several properties at once.

    A broker can compare both approaches and advise whether some properties are better insured separately.

    What a Portfolio Policy Typically Covers

    Cover varies between insurers and policy wordings, but a property portfolio insurance policy for landlords usually includes:

    • Buildings cover. Protection for each building, up to a sum insured based on its rebuilding cost, against insured events such as fire, storm and escape of water. Flood cover depends on location.
    • Loss of rent. Rent lost while a property can't be occupied after insured damage, for a set indemnity period.
    • Property owners liability. Cover for your legal liability if someone is injured, or their property is damaged, because of the condition of your premises.
    • Landlord's contents cover. For items you own in the properties, such as furnishings in let flats or equipment in communal areas.
    • Alternative accommodation. For residential tenants who need to be rehoused after insured damage, subject to policy limits.
    • Accidental damage and legal expenses. Often available as additional covers.

    Rent guarantee insurance is a separate, optional cover that may respond if a tenant fails to pay. It is underwritten separately, usually subject to tenant referencing, an excess period and policy limits, and is not the same as loss of rent. Neither cover pays rent during void periods between tenants.

    If you employ anyone, such as a caretaker, cleaner or maintenance worker, employers liability insurance is a legal requirement in most cases. GOV.UK guidance states that cover must be for at least £5 million.

    Commercial Property Portfolio Insurance as You Add Properties

    The main difference between insuring one property and insuring a portfolio is that the portfolio keeps changing. Your policy needs to keep up.

    Adding a Property

    Tell your broker or insurer before you buy. If you are buying with a mortgage, your lender may require buildings insurance to be in place from a set point, often exchange of contracts, so check the lender's conditions. The insurer will need the property's address, construction, rebuilding cost, use, tenant details and rental income.

    Removing a Property

    When you sell a property, make sure it stays insured until the sale completes, then ask for it to be removed from the schedule. Removing properties promptly helps keep your premium and your schedule accurate.

    Keeping the Schedule Accurate

    A portfolio policy is only as good as its schedule. Review these details for each property at least once a year, and whenever something changes:

    • Rebuilding costs. These should reflect the full cost of rebuilding, including demolition and professional fees, not the market value.
    • Rental income. Loss of rent sums insured should reflect current rents for the full indemnity period (for example, two years' rent for a 24-month period), including any increases from rent reviews.
    • Use and tenants. A change of tenant or use can change the risk.
    • Occupancy. Note any property that is empty or due to become empty.

    How Your Risk Profile Changes as You Scale

    Growing a portfolio usually means a more diverse range of properties, and with it a more varied risk profile. A landlord who started with residential flats may now own industrial units, a mixed-use building and a shop.

    Under the Insurance Act 2015, business policyholders must make a fair presentation of the risk, both when the policy starts and when it is varied. When you ask to vary the policy, for example to add a new property, you must give a fair presentation of the changes relevant to that variation. Most policies also include a condition requiring you to tell the insurer about changes that increase the risk, such as a change of use or a tenant whose activities increase the fire risk.

    Your claims history across the whole portfolio is also likely to be considered, and several small claims on different properties can affect renewal terms.

    Policy Limits Across the Whole Portfolio

    When properties share one policy, it is important to understand how the limits work. Check:

    • Whether each property has its own buildings sum insured, rather than one total for the portfolio.
    • The limit of indemnity for property owners liability, and whether it applies per event.
    • The loss of rent sum insured and indemnity period for each property.
    • Any limits that apply to the whole portfolio, rather than to individual properties.

    Your policy wording sets out how these limits apply. If they are set too low, a serious incident at one property could leave a shortfall, and where the policy applies a condition of average, even a smaller claim at an underinsured property can be reduced in proportion. Reviewing them is one of the main jobs when arranging buildings insurance for multiple properties.

    Unoccupied Properties Within a Portfolio

    A growing portfolio often includes properties between tenants, awaiting refurbishment or bought for redevelopment. Many policies restrict or change cover once a property has been unoccupied for a number of days set out in the policy wording, and apply conditions such as regular inspections. Tell your insurer when a property becomes empty, and consider unoccupied commercial property insurance for longer void periods.

    Legal Duties That Grow With Your Portfolio

    Insurance is only one part of managing a larger portfolio. Some legal responsibilities increase with the number and type of properties you own:

    • Fire safety. GOV.UK guidance explains that for common or shared areas, the responsible person is the landlord, freeholder or managing agent. That includes carrying out and reviewing fire risk assessments.
    • Gas safety. The HSE confirms that landlords must arrange annual gas safety checks on appliances and flues they provide for residential tenants, including flats above shops.
    • Employers liability. If your portfolio grows to the point where you employ staff, employers liability insurance becomes a legal requirement in most cases.

    Insurers may ask how you manage these duties, particularly for blocks of flats and mixed-use properties.

    What Affects Commercial Property Insurance Cost for a Portfolio

    There's no standard price for portfolio insurance cover, because each portfolio is assessed on its own properties. The main factors in commercial property insurance cost are:

    • The number, type and location of properties, including flood risk.
    • The rebuilding costs and rental income insured.
    • The mix of tenants and uses, including commercial uses with a higher fire risk.
    • Any unoccupied properties.
    • Construction type and the age and condition of buildings.
    • Your claims history across the portfolio.

    The cheapest option is rarely the right measure. What matters is cover that reflects each property, its rent and its risks.

    Strategic Risk Management for Growing Portfolios

    As a portfolio grows, a little organisation goes a long way. Strategic risk management for landlords usually comes down to a few habits:

    • Keep a single record of every property, with its rebuilding cost, rent, tenant, lease dates and occupancy.
    • Commission professional rebuild valuations periodically, and after major works.
    • Log maintenance, inspections and safety certificates in one place.
    • Record every incident and claim, even small ones.
    • Align renewal dates where you can, so the whole portfolio is reviewed at once.

    This makes renewals quicker, helps you present the risk accurately and puts you in a stronger position if you need to make a claim.

    How Ellis David Can Help

    Insuring a growing portfolio is easier with a broker who takes time to understand your properties, your tenants and your plans. That way, cover can keep pace with the portfolio, rather than lagging behind it.

    Ellis David has been arranging insurance for over 50 years, from our office on Essex Road in Islington, London. Our UK-based team has 150+ years' combined experience, and we have access to 100+ UK insurers and MGAs and 1,000+ products. We can arrange mixed portfolio cover and property portfolio insurance for multiple properties under one policy, as well as individual policies where a property is better insured on its own.

    There's no call-centre anonymity. You can meet the team who will look after your portfolio, and the same people will help when you need to make a claim.

    Whether your portfolio is mainly let commercial premises covered by commercial landlord insurance, buy-to-let homes and flats that need residential property insurance for landlords, or a mix of both, we can review your existing policies, bring them together, or build a new property owners insurance policy from scratch. Get in touch to start the review.

    Frequently Asked Questions

    What Is Property Portfolio Insurance?

    Property portfolio insurance is a single policy that covers several properties owned by the same landlord or company. Each property is listed on a schedule with its own sum insured and cover. It can include residential and commercial properties, and gives the landlord one renewal date and one insurer to deal with.

    How Many Properties Do I Need for a Portfolio Policy?

    There is no single answer, as each insurer sets its own minimum. Some portfolio policies are available for a handful of properties, while others are designed for larger portfolios. A broker can tell you which options are available for the number and type of properties you own.

    Is Portfolio Insurance Cheaper Than Individual Policies?

    Not always. A portfolio policy can simplify administration and make cover more consistent, but the premium depends on the properties themselves, including their location, use, rebuilding costs and claims history. Comparing both approaches will show which suits your portfolio.

    Can I Insure Residential and Commercial Properties on One Policy?

    Often, yes. Many portfolio policies can cover a mix of residential and commercial properties, including mixed-use buildings such as shops with flats above. Some higher-risk or unoccupied properties may need to be insured separately.

    What Happens When I Add a New Property to My Portfolio?

    Tell your broker or insurer before you buy, so cover can be in place from the right date. The insurer will need details such as the address, construction, rebuilding cost, use, tenants and rental income. The new property is then added to your schedule, usually with an adjustment to the premium.

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